Unibail-Rodamco-Westfield, a leading player in the shopping mall industry worldwide, recently announced positive financial results despite facing tough market conditions. While its UK operations, specifically the Westfield malls in London, encountered challenges similar to its competitors Hammerson and Intu, the company managed to weather the storm and reported overall growth.
In the six months leading up to July 31, the company saw a decrease in rental income in the UK due to increased vacancies caused by company voluntary arrangements (CVAs) and leasing delays stemming from uncertainties related to Brexit. However, Unibail-Rodamco-Westfield experienced substantial growth in tenant sales in its flagship destinations across Continental Europe, the UK, and the US.
The overall net rental income (NRI) for the group increased by 3.3% on a like-for-like basis, with notable gains in Continental Europe, the UK, and the US. Despite the challenges in the UK market, the company saw growth in other regions. However, the UK reported a decrease in NRI, indicating the weaker retail conditions compared to other areas.
In Continental Europe, the company saw a significant increase in total NRI, particularly in flagship destinations where NRI rose by 13.8%. The vacancy rate of 8.7% at the Westfield malls in London highlighted the struggles faced by high-profile properties in the UK retail market, exacerbated by Brexit uncertainties deterring new tenants.
Despite these challenges, Unibail-Rodamco-Westfield’s UK shopping centers saw an increase in footfall outperforming the wider sector. Sales uplifts in May and June were driven by the impact of the Westfield London extension and growth in Westfield Stratford. The acquisition of Westfield significantly boosted total NRI to €1.254 billion.
In Continental Europe, tenant sales in flagship centers surpassed national sales indices, with strong performance reported in the Nordics market and the US. Tenant sales in the US increased by 3%, with flagship locations playing a significant role. Unibail-Rodamco-Westfield remains optimistic about its future outlook, continuing to leverage its premier properties and strategic acquisitions to drive growth and profitability globally.
For more information on Unibail-Rodamco-Westfield’s recent financial results, visit their official website here. To learn more about the impact of Brexit on the UK retail market, check out this insightful article here.
