Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Euronext Amsterdam  >  Unibail-Rodamco-Westfield SE    URW   FR0013326246

UNIBAIL-RODAMCO-WESTFIELD SE

(URW)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Beware of Bargains at Shopping Malls -- Heard on the Street

07/08/2020 | 07:37am EST

By Carol Ryan

After years of worrying about e-commerce, mall owners face another unwelcome reckoning from the pandemic. Their stocks appear cheap, but investors are better off window shopping until the long-term hit to rental income is understood.

Retail real-estate investment trusts have been among the biggest losers in this year's health crisis. Shares in Europe's Unibail-Rodamco-Westfield, which owns Westfield-branded shopping centers in London and San Francisco, have fallen by almost two-thirds this year. The market value of U.S. peer Simon Property Group has halved. On paper, these once-dependable stocks now come with dividend yields of around 10% even after slashing payouts.

Shopping centers used to offer a steady, reliable source of income -- one reason why they traditionally appealed to pension funds. This also explains why mall REITs headed into this crisis brimming with debt. European names have average net borrowings of 13.4 times projected earnings before interest, taxes, depreciation and amortization, according to property consultant Green Street. U.S. peers carry slightly less. It is increasingly difficult to judge where their rental income will settle in the future. Less than one-third of rent due for April was collected by U.S. mall landlords, according to Fitch Ratings.

Permanent rent cuts will be needed to avoid a spike in vacancies. Even well-funded international brands like Swedish fashion chain H & M are negotiating reductions of up to 25%. Bankruptcies of department stores such as J.C. Penney could be especially tricky: So-called cotenancy clauses in the U.S. allow retail renters to break leases without penalty if big anchor tenants aren't replaced within a year to 18 months.

The pandemic has also accelerated the existing threat posed by e-commerce to retail landlords. By the end of this year, 23% of all total European apparel spending will be online, according to Bernstein estimates, up from 18% in 2019. The U.S. faces a similar ramp-up in e-commerce at a time when it has record levels of physical shopping space. Today, there are nine malls for every million households, UBS data shows. This is up from eight in 1980, when e-commerce didn't exist.

Debtholders are bearish about the creditworthiness of mall tenants. The yield on 10-year bonds issued by fashion brands in Europe has increased by nearly 400 basis points since March to 6.6%, according to Green Street's Rob Virdee. The 2.1% average yield for issuances by retail landlords seems complacent by comparison.

The real estate they own is some comfort for both stock and bondholders, but valuations are highly uncertain right now. Enterprise values, which include debt as well as market values, offer a good indication of how investors are pricing Covid-19's impact on underlying property portfolios. URW's enterprise value has fallen by a modest 15% this year, while Simon Property's has dipped 35%.

With shopping malls facing a turbulent future, bargain-hunters on the stock market may find better deals elsewhere.

Write to Carol Ryan at carol.ryan@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
SIMON PROPERTY GROUP, INC 1.04% 95.49 Delayed Quote.10.82%
UBS GROUP AG -0.68% 13.15 Delayed Quote.5.45%
UNIBAIL-RODAMCO-WESTFIELD SE 2.59% 56.94 Real-time Quote.-11.83%
All news about UNIBAIL-RODAMCO-WESTFIELD SE
01/22Unibail-Rodamco-Westfield Completes SHiFT Office Building Disposal for $754 M..
MT
01/21EUROPE : European stocks run out of steam after ECB; energy shares weigh
RE
01/21Unibail-Rodamco-Westfield completes the disposal of the SHiFT office building
GL
01/20UNIBAIL RODAMCO WESTFIELD : Commercial Real Estate Debt Sustained by Central Ban..
DJ
01/14UNIBAIL RODAMCO WESTFIELD : Management Board Charter
PU
01/13UNIBAIL-RODAMCO-WESTFIELD : Kepler Cheuvreux revises his opinion and turns to Ne..
MD
01/11UNIBAIL RODAMCO WESTFIELD : Half-year report of the liquidity facility as of Dec..
PU
01/08UNIBAIL RODAMCO WESTFIELD : Adds Two To Management Board, Names Interim Chief Cu..
MT
01/07UNIBAIL RODAMCO WESTFIELD : Adds Chief Investment Officer, Chief Resources Offic..
MT
01/07UNIBAIL RODAMCO WESTFIELD : Rodamco-Westfield announces an extended Management B..
GL
More news
Financials
Sales 2020 2 471 M 3 007 M 3 007 M
Net income 2020 -7 366 M -8 964 M -8 964 M
Net Debt 2020 25 378 M 30 882 M 30 882 M
P/E ratio 2020 -1,14x
Yield 2020 6,23%
Capitalization 7 885 M 9 598 M 9 595 M
EV / Sales 2020 13,5x
EV / Sales 2021 12,3x
Nbr of Employees 3 561
Free-Float 88,5%
Chart UNIBAIL-RODAMCO-WESTFIELD SE
Duration : Period :
Unibail-Rodamco-Westfield SE Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends UNIBAIL-RODAMCO-WESTFIELD SE
Short TermMid-TermLong Term
TrendsBearishBullishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 19
Average target price 55,24 €
Last Close Price 56,94 €
Spread / Highest target 160%
Spread / Average Target -2,98%
Spread / Lowest Target -66,8%
EPS Revisions
Managers and Directors
NameTitle
Jean-Marie Tritant Group Chief Executive & Operating Officer
Léon Bressler Chairman-Supervisory Board
Fabrice Mouchel Group Chief Financial Officer
Jean-Luc Neez Director-Finance
Dagmar P. Kollmann Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
UNIBAIL-RODAMCO-WESTFIELD SE-11.83%9 598
EQUINIX, INC. (REIT)0.98%64 257
DIGITAL REALTY TRUST, INC.0.68%39 352
ALEXANDRIA REAL ESTATE EQUITIES, INC.-5.26%24 552
REALTY INCOME CORPORATION-3.75%22 343
SEGRO PLC2.81%15 857