Westfield owner's net rental income hit by pandemic

Europe's largest property firm Unibail-Rodamco-Westfield posted a 14.2% like-for-like decline in first-half net rental income on Wednesday after malls were forced to close during Covid-19 lockdowns, but it said shoppers were returning. Unibail reported net rental income of €1.07 billion, down from €1.25 billion a year earlier.

The company had to close almost all its centres for an average of 67 days from mid-March. Malls in Germany, Austria and Poland were the first to reopen, with most of the rest of the group's premises now operational again.

The company said footfall in the European centres has shown an "encouraging recovery" so far. In regions that reopened 11 to 12 weeks ago, footfall is generally trending at 80%-90% of the same period in 2019.

However, Unibail warned that pandemic risk has not fully subsided and its impact on operations and financial results remains material.

The pandemic also affected Unibail's leasing activity, with 661 leases signed group-wide, a 44% decline compared to the first half of 2019.

The bricks-and-mortar retail environment has long been considered challenging in the face of increased competition from the likes of Amazon , and the pandemic has accelerated a trend of customers moving online to do their shopping.

Meanwhile, data from Ernst & Young shows 46% of consumers across Europe aim to shop more locally in the long term than they did before the pandemic.
Unibail, which counts leading European malls such as the Forum des Halles in Paris and Madrid's La Vaguada among its assets, said it is too early to provide new guidance for 2020.

Peer Klepierre also said on Wednesday it was not able to provide reliable guidance for full-year earnings.