5. Disposals
On February 1, 2023, the Group completed the sale of the Westfield North County ground lease located in Escondido, California, to Bridge Group Investments and Steerpoint Capital, transferring ownership and management of the asset. The sale price of $57 Mn (at 100%, URW share 55%) for the asset, which has 30 years left on its ground lease, reflects the property’s book value as at December 31, 2022. The asset is a B- rated, 1.25 Mn square foot property, which is 89% leased.
The Group is engaged in discussions to sell Westfield Valencia Town Center having taken the decision to not repay the $195 Mn15 secured debt on the property that matured on January 1st, 2023. The debt is non- recourse and its non-repayment has no impact on the rest of the Group’s debt. If a sale is not achieved, the property will likely be foreclosed leading to a debt reduction of $97.5 Mn. The asset is currently valued at $100.2 Mn16.
The Group is in active discussions in relation to several of its US regional assets.
URW is committed to its deleveraging plan, which entails a radical reduction of its financial exposure to the US. URW also expects to secure the remaining €0.8 Bn of its €4.0 Bn European disposal target during 2023.
On April 21, 2023, URW completed the acquisition of Hammerson’s 50% stake in the Croydon Partnership at a price in line with the last unaffected appraisal value and for a site which comprises a 10-hectare parcel which includes the Whitgift and Centrale shopping centres as well as high street retail frontage, office blocks and multi-storey car parks in the heart of the designated GLA Opportunity Area in South London. The Croydon project is fully aligned with the Group’s strategy of unlocking mixed-use development opportunities embedded in its portfolio.
6. Financial resources
Since the beginning of 2023, the Group signed €623 Mn of medium to long-term financing17 including:
- €403 Mn in March including a €150 Mn 3-year sustainability-linked term loan and a $275 Mn 5-year17
non-recourse mortgage loan backed by Westfield Galleria at Roseville;
- €220 Mn in April including a €100 Mn 3-year sustainability-linked term loan and a €120 Mn 5-year non-
recourse mortgage loan to refinance a maturing loan backed by Paunsdorf Center18.
Taking into account these loans, the Group’s cash-on-hand and undrawn credit facilities position amounts to €13.7 Bn19 on a proportionate basis (vs. €13.2 Bn as at December 31, 2022), including €4.2 Bn20 of cash on hand and €9.4 Bn17 of credit facilities, of which c. €2.1 Bn is maturing over the next 12 months. URW is considering opportunities to extend or renew part of these lines. This liquidity covers more than 36 months of debt maturities21.
The terms and conditions of the €1.25 Bn perpetual non-call 2023 hybrid instrument provide the issuer with a call option22 in 2023, and annually thereafter.
The decision regarding this call will be made ahead of its First Reset Date23 (i.e. October 25, 2023).
On April 14, 2023, S&P published a research update confirming the “BBB+” long-term rating of the Group with “stable” outlook.
7. Outlook
Based on the performance in the first quarter of 2023, the Group reconfirms its 2023 Adjusted Recurring Earnings Per Share (AREPS) guidance to be in the range of €9.30 to €9.50 per share.
This guidance does not include major disposals in the US in the context of the radical reduction of its financial exposure.
The Group assumes no major energy-related restrictions, nor major deterioration to the macro-economic and geopolitical environment.