This article is from the Australian Property Journal archive
MALL owner Unibail-Rodamco-Westfield N.V. (URW NV) saw footfall increase in 2023 to above pre-COVID levels as shoppers increasingly came to its centres for an “experiential” experience, but the company recorded a heftier full-year loss than in 2022.
The ASX-listed company has shopping centre and office assets in the United States and the Netherlands. In its full-year results for 2023 is said tenant sales in the US increased by 3.0%, or 4.8% excluding the luxury category, and were 19.2% above 2019’s numbers.
The performance compared with an average core inflation of 4.8% in 2023 and a national sales index of 4.0%.
URW NV said the performances in 2023 were driven by the experiential sectors. Entertainment was up 26.7%, food and beverage by 13.5%, fitness 13.4%, and health and beauty by 8.9%.
Fashion only inched upwards but is 16.8% above 2019 levels. Luxury saw a 6.5% decline, but remains significantly above 2019 levels – by some 62.3%.
The net result for the period was a loss of €692.4 million, a drop from 2022’s €233.7 million loss.
The net operating result of a €234.1 million loss was an improvement on the €407.4 million loss a year prior.
Rent collection in 2023 was at 98%.
In 2023, 758 leases were signed, representing 2,582,895 sq ft (around 240,000 sqm, up 11%) and €175.7 million of MGR (up 28%) on 671 leases (up 13%). As market conditions improved, the number of long-term deals signed also increased from 343 to 489 (up 43%), representing 65% of 2023 deals, compared to 51% in 2022.
Leasing spreads on re-lettings and renewals was 16.8% for US shopping centres, up 8.1%, and 20.6% for flagships.
US shopping centre net rental income (NRI) was down $63.4 million, impacted by 2022 and 2023 disposals and foreclosures.
Overall, US like-for-like shopping centre NRI increased by 1.9%, mainly driven by flagship assets. Like-for-like NRI growth for flagship assets was up 6.2%, helped by a net leasing revenue uplift of 5.9%, an increase in variable income and recovered property taxes.
Like-for-like NRI performance for regionals was down 12.3% and down 5.2% for CBD assets.
Vacancy was down 190 basis points (bps) over the year, which the group said driven by a proactive leasing approach and change in scope, with the group “focused on long-term lettings and relettings, while relying on short-term deals in a more selective and limited way mainly on renewals”. Vacancy decreased by 90 bps to 7.3% in the flagships, below its pre-COVID level of 7.7%. It decreased by160 bps to 10.1% in the regionals, while the vacancy of the CBD assets decreased by 290 bps to 20.1%.
Occupancy on a GLA basis was 93.5%.
