(AOF) – Unibail-Rodamco-Westfield (URW: +0.74% to 48.95 euros) announced on Monday the sale of Westfield Valencia Town Center, a regional shopping center located in Santa Clarita, California, to Centennial Real Estate. The amount is 199 million dollars (i.e. 184 million euros, at 100%, share of URW 50%), greater than the amount of the debt of 195 million dollars (at 100%, share of URW 50%) on the asset.
By completing the transaction, URW has contributed to its goal of deleveraging while partnering with Centennial and its creditors to find an alternative to transferring ownership to them.
The value of the transaction reflects a discount of less than 3% compared to the last valuation. Westfield Valencia Town Center is an A-rated shopping center, 1 million square feet (92,900 square meters), with an occupancy rate of 87%. Since 2021, URW has generated $1.8 billion in proceeds from its US deleveraging.
Unibail “has grown over the years thanks to large-scale developments”, recalls Kepler Chevreux in a note published on September 4. The Westfield takeover in 2018 resulted in “a complex new structure with exposure to congested retail markets such as the US and UK”, just as “the paradigm shifted from physical to selling online”. URW is currently facing high levels of debt and the specter of a downgrading of its credit rating, which explains why it is currently in the midst of a deleveraging phase.
Kepler Chevreux takes over the monitoring of URW on the Buy side and with a target price of 66 euros. “We believe that the risk/reward balance of the investment case has started to trend upward,” the brokerage explained, citing “the improving retail environment, the company’s ability to achieve its disposal target in Europe (700 million euros in the second half), the stability of the valuation of the portfolio after years of decline, the resumption of the dividend policy and an overly cautious consensus which could be led to revise its forecasts the rise “.
The broker believe that any news on deleveraging would be welcomed. “An exit from the United States could be the icing on the cake, even if it remains difficult in the current context, given the scale of the participation”, he underlines.
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