Trading update Q1 2018
Occupancy shopping centres
stable at 95.5%
Occupancy increases in France
and Belgium, stable in the Netherlands and a decrease in
Outlook reconfirmed: direct
result FY 2018 at € 3.30 - € 3.40 per share
The Dutch retail spending continues to benefit
from the continued economic strength. The amount of bankruptcies in
the retail sector continues to decrease. The strengthening of the
economy results in both an increasing demand from international
retailers showing confidence in the market by seeking new
locations, as well as retailers rationalising their store base. A
critical stance towards location quality remains key. We notice
good interest for most of our Dutch centres, due to the
improvements that have been implemented over the past
years. Generally speaking, weaker locations are seeing
continued downward pressure on rents. Market rents are broadly
stable, with an upward trend for low-vacancy locations.
Following a strong year of recovery in Finland in
2017, the first quarter of this year continues to see a positive
trend in terms of tenant demand for good quality retail locations.
We notice good interest from food & beverage operators.
International retailers express an interest to enter the Finnish
market in 2019. Banks are closing their branches to reduce costs.
This is impacting occupancy on the shorter term.
In Belgium the retail market can be described as
cautiously optimistic. There is a divide between the strong, larger
centres and smaller centres in less urbanised areas. To attract the
most important anchor tenants in their shopping centres, landlords
need to share the risk with retailers by accepting sales based
rents or fit-out contributions. The development of market rents is
showing a stable picture for our quality centres. The confidence
from investors in the Belgian shopping centre market has recently
been underpinned by two major deals, shopping centre Dockx in
Brussels and Rive Gauche in Charleroi.
In France private consumption is set to grow
further following a recent recovery in economic activity and labour
market. However, this is not yet filtering through in every segment
for physical retail. We notice a cautiously increased demand from
retailers for our centres. Rental values are stable for the best
high street locations and prime regional out of town schemes. Rents
are expected to decline in the other categories.
Wereldhave had a good start of the year. Our
occupancy developed flat at 95.5%, despite the harsh retail
conditions in France and a slight decrease in Finland. The 36.9m
footfall was slightly above market average and a strong leasing
activity was underpinned by signing of 112 leases signed on average
slightly above prevailing market rent levels. Although at an early
stage, the fundamentals of the French leasing portfolio improved.
Occupancy moved up 20bps to 93.4% and 1.2% of the French rents were
turned from temporarily contracts into permanent ones. With an
approx. 50% increase in footfall in March, we can look back at a
very successful opening of the Primark in Docks Vauban. This was
followed by a very successful opening of the extension &
refurbishment of Les Bastions in Tournai. Also we take pride in
winning the NRW marketing prize for the best brand activation event
in the Netherlands for the Black Friday Shopping Night.
Gross rental income for the first quarter of
2018 amounted to € 55.4m, which is 3% below Q1 2017. The decrease
is largely due to disposals in the Netherlands in 2017, lower
rental income in France, partially offset by positive rental growth
in the Netherlands and Finland.
In Belgium, occupancy of the shopping centre
portfolio went up by 30 bps to 95.2%. The lease for the Carrefour
unit in Liège was not terminated and now expires in September 2021.
For the Carrefour in Genk, no termination notice has been received
yet. However, Wereldhave Belgium continues to explore alternatives.
Several prospective tenants have expressed their interest for both
the Carrefour locations. New leases were signed with H&M, JBC,
Kruidvat and Etam Lingerie in Tournai and Only in Genk Shopping1.
Footfall in the Belgian shopping centres went up by 4.1%.
In France, new leases were signed with Bershka,
SuperDry, Guess and Jungle Coffee. Occupancy stood at 93.4% at
March 31, 2018 (Q4 2017: 93.2%). The occupancy structure also
improved, as temporary leases accounting for 1.2% of the occupancy
were replaced by permanent contracts. Turnover in the fashion
industry has been soft. This will be reflected in our rental income
through sales based rents. Footfall in the French centres went up
by 3.9%. In Docks Vauban, Le Havre, the new Primark opened its
doors on February 21, 2018. Since the opening, footfall in the
centre increased by approx. 50%.
In the Netherlands, occupancy remained stable at
96.5%. New leases were signed with C&A (Vier Meren, Hoofddorp),
Hoogvliet (Koninghoek, Maasssluis) and Miss Etam (City Plaza,
Nieuwegein). Footfall in the Dutch shopping centres decreased by
3.2%. Adjusted for impact of the redevelopments in Capelle aan den
IJssel and Arnhem, footfall was roughly in line with the market
average. Wereldhave's Black Friday Shopping Night was awarded the
NRW marketing prize for the best brand activation event. Four
shopping centres participated, engaging 388 retailers in the event,
which was supported by a strong cross media strategy and campaign.
The event boosted footfall and more than 70% of the retailers
reported sales above or far above target, with 43% of retailers
even reaching record sales.
In Finland, occupancy decreased by 70 bps to
96.0%. The decrease is mainly due the departure of a bank,
for which no immediate replacement has been found. New leases were
signed with Stadium and Elisa. Taco Bell and Lucky Bastard signed
for units in the new F&B area near the Finnkino cinema. JD
Sports opened their first store in Finland and Regus opened a
flex-office of approx. 1,000 m² above the shopping centre.
Footfall in Itis went down by 2.0%, mainly due to the cinema
construction and the impact on parking facilities.
During the first quarter, Wereldhave sold 89
residential units above the Koperwiek shopping centre in Capelle
aan den IJssel in the Netherlands. The transaction was completed
for € 12.8m, which is at book-value.
In Belgium, the 15,000 m² extension of the Les
Bastions shopping centre in Tournai was completed, with the grand
opening on April 12, 2018. The centre doubled in size to 30,000 m²
and together with the adjacent retail park, covers a total floor
space of 40,000 m². The project was completed on schedule and
within budget. Large and renowned international retailers have
opened their stores, such as Zara, Bershka, JBC, Bel&Bo, Etam
Lingerie and Armand Thiéry. The investment amounted to € 77m and
the centre was 98% let before opening.
In France, the redevelopment of the Verrerie
project in the Saint Sever shopping centre is progressing well. It
will add an extensive food hall in front of the Kinepolis cinema.
We have made further progress on pre-leasing, which currently
stands at 75%. Completion of the € 22m investment project is
scheduled for 2019.
In Finland, the creation of a 9-screen Finnkino
with Finland's first IMAX theatre in the heart of the Itis shopping
centre is well on track. Opening is scheduled at the end of 2018.
The project also involves some retailer relocations and a food and
beverage court in front of the cinema.
In the Netherlands, the redevelopment of
Koningshoek in Maassluis was successfully concluded in the first
quarter, with the opening of the Hoogvliet supermarket, the third
supermarket in the centre. The total investment amounted to € 27m
and the centre is 95% let.
In Arnhem, the € 19m redevelopment of Presikhaaf
shopping centre is making good progress. Two supermarkets (Albert
Heijn and Aldi) and a fresh court at the front of the centre were
completed. The relocation of the third supermarket to the centre,
Coop, will be completed by the end of 2018 / early 2019.
In Capelle aan den IJssel, the construction of a
parking garage for 280 cars and the creation of a new food court
with adjacent shops and a passage started in 2017. The investment
amounts to approx. € 32m, with the first shops ready for fit-out by
tenants from May 2018. The passage to improve the connection of
both parts of the centre will be completed in the beginning of
In Tilburg, the City has adopted the zoning scheme
for the second phase of the inner city redevelopment scheme. Plans
for the creation of a passage between the Heuvelstraat and the
redevelopment of the Emmapassage are currently being drafted, but
the project is not yet committed.
Nominal interest-bearing debt was € 1,586m at
March 31, 2018, which together with a cash balance of € 23m gives a
net debt of € 1,563m. Undrawn borrowing capacity amounted to € 181m
and the Loan-to-value ratio stood at 41.1% (December 31, 2017:
40.7%). As at March 31, 2018 the average cost of debt and ICR were
1.91% and 6.3 x respectively and the EPRA NAV per share stood at €
50.08 (December 31, 2017:
The operational performance is in line with our
expectations. We will continue our program of asset rotation, as
announced in the 2017 - 2019 management agenda. We pursue
divestments of up to € 200m, of which until now € 90m has been
achieved. Wereldhave reconfirms its outlook for 2018 of a direct
result between € 3.30 and € 3.40 per share. Dividend for 2018 will
be at a level of € 2.52, payable in four equal (interim) dividend
payments of € 0.63 per quarter.
20-04-2018 Press Release Trading
update Q1 2018
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Wereldhave N.V. via Globenewswire
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