Westfield-owner Unibail raises forecast on strong leasing demand, shares rise

By Olivier Cherfan and Alizee Degorce

(Reuters) -Shopping mall owner Unibail-Rodamco-Westfield raised its adjusted recurring earnings per share (AREPS) guidance on Thursday for 2022 after first-half tenant sales in continental Europe recovered to pre-COVID levels sooner than expected.

The shares of the group, which counts Forum des Halles in Paris and Madrid’s La Vaguada among its assets, were up 2.1% in early trading and among the best performers on Amsterdam’s blue chip index.

Unibail said its first-half reported AREPS, up 53.1% year-on-year, was mostly driven by retail operation performance, including the end of COVID-19 rent relief, lower doubtful debtors with improved rent collection, and higher variable income.

The group now sees 2022 AREPS at least at 8.90 euros, up from a range of 8.20 to 8.40 euros forecast previously.

“We are seeing strong leasing demand, with retailers expanding with us, thanks to the quality of our assets, which are located in the best catchment areas, and have an affluent customer base,” Chief Executive Officer Jean-Marie Tritant said in a statement.

JP Morgan, which has an underweight rating on the stock, deemed the recovery in tenant sales “encouraging”.

According to its de-leveraging plan announced last year, Unibail reported its net financial debt dropped by 1 billion euros ($1.02 billion) in the first half through an asset sale in the United States.

Disposals in Europe should be done by the end of 2022 – as 80% of its 4 billion euro plan has already been completed there. The group is confident it will achieve its goals in the United States by 2023, Unibail said in a conference call.

“We continue to be cautious on the outlook for retail given pressure on the consumer while we reiterate our stance that disposal of the US asset remains a key driver for deleveraging and future forecasts,” JP Morgan added.

The company also reported first-half earnings before interest, taxes, depreciation and amortization (EBITDA) rose 48% year-on-year to 1.14 billion euros.

On Tuesday, the group’s main rival Klepierre also raised its full-year guidance.

($1 = 0.9799 euros)

(Reporting by Olivier Cherfan and Alizée Degorce in Gdansk; Editing by Carmel Crimins, Tomasz Janowski and Muralikumar Anantharaman)