The shopping center giant Unibail-Rodamco-Westfield (URW) will sell part of its assets in Europe and significantly reduce its presence in the United States to bail out its heavy debt, thus endorsing the strategy defined in the fall by its new direction.
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In Europe, the group will sell assets for 3.2 billion euros by the end of 2022. In the United States, it will significantly reduce its
“financial exposure”
to reduce its net debt, which amounts to 24 , 2 billion euros.
And the group also announced
"the suspension of the dividend until 2022"
, presenting its annual results on Wednesday.
This new strategy adopted by URW, which notably owns the Forum des Halles shopping center in Paris, follows the renewal of its management after a sling of shareholders led by Léon Bressler, former CEO from 1992 to 2006 of the property company, and by the entrepreneur Xavier Niel (Iliad).
In particular, they questioned the takeover in June 2019 of the Anglo-Saxon giant Westfield for more than 20 billion euros, which indebted the property company, and demanded the sale of the centers acquired in the United States on this occasion.
Last year, net rents collected by URW in its shopping centers were down 26.4% to 1.79 billion euros, according to the results released on Wednesday.
And its recurring earnings per share, the benchmark index of the sector, fell to 7.28 euros, a drop of 41%, in particular due to the collapse of the
“Congress and Exhibition” activities
and the management of airport terminals. in the United States, heavily affected by government restrictions related to the coronavirus.
Refocusing on Europe
“Reducing indebtedness is an essential priority and will be achieved through strict control of investments, control of our costs and the pursuit of disposals,”
said Jean-Marie Tritant, the new chairman of the management board, quoted in the communicated.
URW will carry out
"the sale of the 3.2 billion euros of assets necessary to reach the objective of 4 billion euros (of disposals) in Europe before the end of 2022"
, he added, the 800 million remaining having already been realized through the sale of offices.
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In addition, the American assets of the group
"and in particular the regional assets which do not correspond to (its) positioning will serve the deleveraging of the company"
, explained Jean-Marie Tritant to AFP.
The disengagement in the United States will be implemented
"when the market reopens, which should occur with the rebound of the American economy in 2022"
, he estimated.
“We will substantially reduce our presence in the United States over the next 24 to 36 months so that this company, URW, can be seen by investors as a European company invested in the best retail assets in Europe, in the best catchment areas and with an almost exceptional growth potential,
”he added.
The group open to "any possible option"
The Chairman of the Management Board insisted on the
“resilience”
of the group in an environment strongly affected by the restrictive measures linked to the coronavirus which only allowed
“70 days of normal operations”
and caused
“93 days of total closure”
.
85% of URW's assets are made up of shops, 8% offices, 5% conference and exhibition sites and 2% services.
The group has a total of 87 shopping centers in Europe and the United States.
In this country, it holds 13 to 14 billion euros in assets, including 28 shopping centers and 14 regional centers.
“Tomorrow we will find partners, investors, to take over all or part of these
American
assets,”
said Jean-Marie Tritant, adding that the group was opening up to
“any possible option”
.
As part of its debt reduction policy, URW has also reduced its portfolio of development projects to 4.4 billion euros, compared to 8.3 billion euros at December 31, 2019.