Feb 5, 2014
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Unibail-Rodamco revenue up 2.7, beats profit targets

Feb 5, 2014

PARIS, France - Unibail Rodamco, Europe's biggest property group, said on Tuesday its 2013 rental income rose 2.7 percent to 1.35 billion euros as stronger revenues from well-positioned shopping malls helped exceed profit targets despite the region's weak economic recovery.

The company's commercial property portfolio is mostly made up of large European shopping centres, with a focus on huge urban malls that are seen less vulnerable to consumer belt-tightening. Unibail's net profit increased 11.2 percent to 986 million euros.

Unibail, whose portfolio includes a mall under the Louvre Museum in Paris and the Arkadia in Warsaw, has concentrated on high-traffic areas and relatively upscale tenants like Apple and clothing brands Uniqlo and Zara.

"It was a very tough economic year, but the results have been resilient, Jaap Tonckens, Chief Financial Officer, said in a phone call with journalists.

Unibail's 2013 recurring earnings per share rose 6.5 percent to 10.22 euros, higher than its guidance of at least 5 percent, helped by strong leasing performance and a record-low cost of debt.

Unibail expects recurring EPS to grow by at least 5.5 percent in 2014 and between 5 to 7 percent in the next five years. Unibail will also recommend 2013 dividend at 8.9 euros ($12.03) per share, up 6 percent from the previous year.

"For 2014, the group is positive about its expectations on rental income growth," the statement said.

"This is driven by on-going strong fundamentals, such as low vacancy, sustainable occupancy cost ratios and good rental uplifts".


Weak economic growth weighed on tenant revenues, which grew 1.1 percent, while higher rents on renewals and relettings helped rental income for shopping malls rise 4.7 percent like-for-like to 1.1 billion euros ($1.49 billion).

Stronger performance in the shopping malls helped offset a decline in the offices market, where rents have been under pressure, and in the exhibitions business.

Investors wondered if Unibail follows the specialisation strategy of its peers, such as Klepierre, which focuses on shopping malls and selling off offices, or Simon Property Group, which plans to spin off smaller malls.

"We are comfortable where we are, however, we do have a significant interest in continuing to focus on the large shopping centers," Christophe Cuvillier, Chief Executive Officer said.

He added that Unibail has already sold non-core assets worth 5.6 billion euros since the merger in 2007. Shopping malls with more than 6 million visitors per year now make up for 90 percent of the retail portfolio.

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