Unibail-Rodamco-Westfield successfully completes the disposal of five French shopping

The five centres are valued at more than €2bn

Written by Georgie Dobie

Posted 01.06.2020 | Retail

Unibail-Rodamco-Westfield successfully completes the disposal of five French shopping thumbnail

Unibail-Rodamco-Westfield (URW) has announced the successful completion of the disposal of a portfolio of five shopping centres in France to the Joint Venture (JV) formed by URW, Crédit Agricole Assurances and La Française, announced on February 12 2020.

Christophe Cuvillier, Group CEO of URW, said: “The closing of this transaction is a major milestone in the Group’s disposal strategy. In a very challenging environment, it demonstrates the quality of our assets and illustrates the trust of our partners in the management of URW to cope with the current situation and to generate future growth in the assets we operate. Today marks the beginning of a new strategic partnership formed with Crédit Agricole Assurances and La Française and we look forward to working and succeeding with them.”  

The consortium of leading investors comprised of Crédit Agricole Assurances and La Française will hold 54.2 per cent of the newly formed JV and URW 45.8 per cent. The new JV now owns the following assets: Aéroville and So Ouest in the Paris region, Rennes Alma in Rennes, Toison d’Or in Dijon and Confluence in Lyon.  

As at today, three of these centres have re-opened post the Covid-19 restrictions, showing encouraging footfall performance – with Alma in particular already at around 90 per cent of pre-crisis levels – as well as, based on information from tenants, higher average baskets and conversion rates. The other two centres will re-open tomorrow, 30 May.  

The implied offer price for the assets at 100 per cent is €2m (excluding one tenant which exercised a pre-emption right), as announced on 12 February. A syndicate of banks has funded the underwritten €1bn secured financing for the JV, with a seven-year maturity.  

In light of the Covid-19 crisis and reflecting URW’s confidence in the strength of these assets, the Group has made some adjustments to provide comfort to the co-investors. The total exposure for URW under these adjustments amounts at most to only 2.4 per cent of the implied price of the assets at 100 per cent:  

  • A rental guarantee of up to €45m has been granted to the JV to cover a possible short-fall in net rental income over the business plan to 31 December 2024. URW’s net maximum exposure under the guarantee is €24.4m;  
  • A participative loan and earn-out mechanism has been implemented, with a maximum amount at risk of €24.5m and a potential earn-out to URW of €20m should the returns to investors be lower or exceed the agreed levels.  

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