Unibail-Rodamco announces half-year results (FR)

"Unibail-Rodamco is pleased to report +0.9% growth in recurring earnings per share as a result of a contained cost of debt, tight cost control and a strong like-for-like net rental income increase of +5.5%.

"In H1-2011, the premium retail positioning of the Group's centers saw tenants' sales rise by +4.2% while national retail statistics in the Group's countries averaged only +0.8%," says Guillaume Poitrinal, CEO and Chairman of the Management Board.

"This success is largely based on the strategy of focus on high footfall assets, offering deeper client satisfaction. The Group is also preparing the future with an expansion of its development program to €6.9 billion and many new construction starts."

Strong like-for-like growth
With tenants' sales picking up, new premium retailers entering the Group's malls and an overall larger exposure to high potential shopping centers, the Group returns to levels of net rental income growth of its shopping center division, on a like-for-like basis, of 430 basis points over indexation. In H1-2011, the Group signed 60 contracts with premium retailers, such as Hollister, Apple, Forever 21 and Kiko vs. 48 in the whole of 2010.

The office sector also saw overall positive like-for-like net rental income growth of +3.2%, while the Convention & Exhibition sector saw a high H1-2011 activity level including the highly successful biennial 'Le Bourget Airshow' in June.

Divestments on track
€5.4 billion of disposals have been realized since the merger in June 2007. Approx. half of these disposals (€2.6 billion) have been completed since the start of 2010, including €1.1 billion of disposals signed in H1-2011 with an average 9.1% premium over last external appraisals. The disposal program remains unchanged.

Asset values up, supported by increasing rents
The Group's portfolio Gross Market Value stood at €24.8 billion, up 2.4% like-for-like compared to year-end 2010. The Group's Going Concern Net Asset Value per share increased to €138.80, up 1.7% compared to December 2010 thanks to a like-for-like asset revaluation result at €4.50 per share, of which €3.10 is driven by rental income growth. Net initial yield shift was 20 basis points for the retail portfolio (to 5.5%) and 10 basis points for occupied offices (to 6.5%).

Acceleration in developments
While the development portfolio grew with €300 million to €6.9 billion, many projects moved closer to the execution phase. Construction works have started on the Majunga tower in La Défense, the first 'Excellent' BREEAM-certified office building in France.

Preliminary works were launched for the Aéroville shopping center at Charles-de-Gaulle Airport in Paris, and the renovations and extensions of Forum des Halles in Paris, Centrum Cerny Most in Prague and Fisketorvet in Copenhagen are under way.

Low cost of funding
Interest rates stayed at historical low levels and the Group's average cost of debt came to 3.6% in H1-2011. The Group raised €555 million new medium- and long-term debt. Net financial debt stood at €9.3 billion. The Loan-to-Value ratio stood at 38% as of June 30, 2011 while the Interest Coverage Ratio was at 3.8 times over the period. Undrawn credit lines amounted to €2.6 Bn. During H1 2011, S&P and Fitch confirmed the 'A' rating for the Group, S&P upgraded its outlook to 'stable'.

The Group reiterates its FY-2011 Recurring Earnings per Share outlook of -3% to -5%, reflecting the impacts of the exceptional distribution of October 2010, and the effects of the ongoing disposal program. Based on the H1-2011 results, including some elements that will not be repeated in the second half, the Group expects to come out closer to -3%.

Source: Unibail-Rodamco

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