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Unibail-Rodamco-Westfield Makes Progress in Delivering Strategy

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Despite a somewhat challenging retail environment, Unibail-Rodamco-Westfield CEO Christophe Cuvillier said the firm made great progress in delivering its strategy of concentration, differentiation and innovation. “We are starting to see the positive impact of the Westfield transaction,” he said on the firm’s Q2 earnings call.

The company has been operating as one group, Unibail-Rodamco-Westfield from the completion of Westfield acquisition on June 7, 2018. “We have taken somewhat a cautious view of the current environment.”

He notes that thanks to an intense leasing activity including the reletting of vacated space and a less demanding H2 comp, the company forecast the overall growth of the full year of its like-for-like in Continental Europe to be around plus 3%.

Growth is very strong, plus 5.3% through June, of which plus 5.7% for flagships, he added. “Footfall is up plus 3.2% and plus 3.6% for flagships. These figures reflect the superior quality of our portfolio and the efforts we’ve made in the last years to concentrate on the best assets, in the best catchments areas and to significantly improve our tenant mix.”

Two very good examples of successes are the REITs latest dining and leisure extensions. “In Vélizy 2, the 20,000 square meter extension was fully let at opening in March with 23 new restaurants and a new 18-screen cinema. Three months after opening, the Vélizy 2 UTC cinema already ranks in the top 10 in France, when the previous cinema was not in the top 200. And I think this is an outstanding result, and the cinema is still growing. As a direct result, since the extension opening, footfall in the whole center increased by plus 13%. In Carré Sénart, initially extended in H2 2017, a similar phenomenon was achieved, although, at a smaller scale, with a further extension of the dining plaza and the addition of an IMAX screen in the Pathé cinema.”

Vacancy is still too high though, he said, “as we showed during our investor days in London in June, at 8.7%, mostly due to Westfield London Phase I where the backfill of retailers having expanded in Phase II is not complete.”