Join our daily newsletter At The Bell to receive exclusive market insights
- Commercial property giant Unibail-Rodamco-Westfield (URW) says Covid-19 has begun to infect its retail portfolio
- Store closures and limited trading hours across Europe have impacted the company’s retail operations
- On top of that, Unibail says the disruption is far from over
- Bans on meetings of more than 100 people have also impacted the company’s convention and exhibition business
- In the wake of disruptions, URW says it’s taking measures to assist retailers, tenants, and partners through the crisis
- The announcement wreaked havoc on Unibail’s share price today, triggering a 21 per cent fall to trade at $4.71 apiece
Commercial property giant Unibail-Rodamco-Westfield (URW) has released a market update detailing the impacts of the coronavirus pandemic.
As the Covid-19 outbreak has spread, so too has its devastating impact on national and global economies. Consequently, URW has been hit hard, while self-isolation keeps people and workers from its retail centres around the world.
Local European authorities have ordered all non-essential stores to close in France, Spain, Poland, Austria, Slovakia, and the Czech Republic. As a result, many of URW’s shopping centres have shut up shop — with only supermarkets, food stores, and pharmacies staying open.
Denmark put limits on retail trading hours, which have also made a dent in Unibail’s operations. The company expects that governments in other countries will soon adopt similar measures.
URW shopping centres that remain open continue to trade as usual for now, but many are feeling the sting from reduced customer numbers.
The company’s convention and exhibition business has also been hit as a result of bans on mass gatherings. In France, the government is currently restricting any events with more than 100 people in attendance.
So far, however, URW’s office division has not felt the effects of the coronavirus.
While it’s too early to determine the full extent of the damage, URW says it’s working to support its retailers, tenants, and partners. The company is currently unsure how the crisis will impact contractual obligations, but has opened a dialogue with tenants to address the unprecedented challenge.
Currently, URW is reducing non-staff expenses and deferring non-essential capital expenditure. The company will also use any relevant facilities or arrangements provided by various national authorities to help businesses through the crisis.
In the meantime, URW will weather the economic storm and practice preventative measures as best it can. The company continues to benefit from its geographically diversified exposure and undrawn credit facilities.
URW’s share price dropped sharply by 21 per cent today, and is trading at $4.71 per share at 11:34 am AEDT.
