Westfield’s UK income hit by retail CVAs and leasing delays

The shopping centre goliath posted its results for the first half of the year up to July 31, which showed that like-for-like rental income decreased by 3.1%.

The landlord conglomerate, now Unibail-Rodamco-Westfield, put this slide in income across UK schemes to its vacancies number, which stood at 8.7% due to “non-renewals, the impact of retailer bankruptcies and the delays in leasing at Westfield London” amid Brexit uncertainty deterring new tenants from entering the market.

Westfield reported a 6.4% increase in footfall across UK shopping centres in the first half of the year, which outperformed the wider sector by 770 bps.

It also reported an uplift in sales from tenants on its schemes through May and June, with 7.9% and 7.1% increases respectively.

Unibail-Rodamco-Westfield put these increases down to the opening of its extension at Westfield London and “the continued growth of Westfield Stratford City” in east London.

The shopping centre provider posted a 3.3% like-for-like growth in total rental income across its portfolio to €1.2bn.

In terms of asset disposals, Westfield has agreed more than €1.2bn (£1.09bn) over the period, bringing the total since June 7, 2018 to €3.2bn. However, its development pipeline has been “scaled back” to €10.3bn.

Group chief executive Christophe Cuvillier said: “Unibail-Rodamco-Westfield (URW) delivered solid results, despite the challenging retail environment. With a unique transatlantic platform, connecting the best brands with over 1.2 billion customer visits each year in the wealthiest catchment areas, the URW portfolio is at the forefront of the changes in a rapidly evolving retail environment.

“We are making significant progress in executing on our strategic objectives of concentration, differentiation and innovation, with very strong tenant sales growth in Europe and the US, the disposal of €3.2bn of assets above book value over the past 12 months, and multiple openings of restaurants, leisure concepts and Digital Native Vertical Brands across our portfolio.”