French shopping center giant Unibail-Rodamco-Westfield has recently unveiled its strategic plan titled Reset, aimed at strengthening its financial position and flexibility to achieve long-term success. The company, known for owning popular shopping mall chains like Westfield, has provided an update on footfall, sales, and rent collections, revealing positive trends in various regions.
Footfall in Continental Europe has shown promising signs of recovery, hovering between 80% to 90% of last year’s levels, indicating a gradual improvement. The UK is also witnessing an upward trend in footfall, ranging from 60% to 70%, attributed to the return of office workers post-lockdown and the conclusion of summer vacations. However, footfall in US centers lags due to ongoing restrictions in some areas.
Tenant sales within Continental Europe have displayed a positive recovery trajectory, with a decline of 26% in June improving to -16% in July and further to -12% in August. This suggests that consumers are more inclined to spend while visiting the malls, leading to a quicker sales recovery compared to footfall. The reopening of shopping centers in June resulted in increased conversion rates and average spending per visit.
Recent data from August shows a significant improvement in tenant sales in France, with only a 5% decrease compared to last year. This marks a substantial improvement from earlier months, with June and July reporting declines of -29% and -15% respectively. In contrast, tenant sales in the UK continue to struggle, with declines of 70% in June, followed by -47% in July and -34% in August.
Unibail-Rodamco-Westfield emphasizes fair and tailored rent negotiations with tenants, aiming for a collaborative approach to address individual circumstances. The company reports steady progress in rent collection rates, particularly in Continental Europe, leading in collections for both July (81%) and August (81%).
The Reset plan includes a capital raise of over €3.5 billion to immediately reduce leverage, along with targeted cash savings of nearly €2 billion and disposals worth €4 billion by the end of 2021. These initiatives are designed to enhance the company’s financial stability and support its long-term growth objectives.
For more information on Unibail-Rodamco-Westfield and its strategic plan Reset, visit their official website here. To read about the latest updates and developments in the retail industry, click here.
