Wereldhave’s tenants are now paying rents on time. The underlying business wasn’t that dynamic but Q3 21 provided additional proof of stabilisation.
Companies: Wereldhave N.V.
On top of its H1 21 figures, Wereldhave disposed four out of six of its French malls for a cash consideration of €305m. The latter book value was €504m. Such a cash-in will rebalance the LTV ratio to a much affordable level of 42% pro forma.
Guidance wasn’t lowered but FY 21 will come in at the lower end of it (€1.80 – €2.00 FFO per share) due to the H1 21 lockdowns. Net Rental Income was down 21% yoy. With the LTV standing at 46%, it is too high in our view, but disposals are on track.
Consolidated vacancy was up by only 50bp from 5.4% to 5.9% yoy. It was down 10bp (improvement) in Q4 20 alone. This confirmed URW’s behaviour in Continental Europe, with low additional vacancy attributable to the very low number of retailers’ bankruptcies.
Following Mercialys, Wereldhave has confirmed some early signs of stabilisation in Q3 20. Local units have proven more resilient than bigger or in-town ones. Wereldhave didn’t pass the pass anyway but, following the negative Q2 20, Q3 20 looks to be something of a respite.
Our FY 20 EPS is too high and we will have to cut it. However, our valuation still accounts for the contribution of a capital increase in FY 21 and our target price should stay broadly stable. We maintain our Sell rating.
Wereldhave will be impacted by the “low” footfall of Q1 20, or “no” footfall of Q2 20. Progressive de-containment measures will probably lead to a long and slow recovery. The big issue will be the forward balance sheet. We stay negative.
Following its Finnish disposal in October 2018, Wereldhave will exit the French market. The strong negative revaluations of €450m in FY 19, or 13% of the full portfolio’s value, pushed the LTV ratio to 45%. The strategic plan will focus the company on both the Netherlands and Belgium. Should it fail, the risk of a right issue in the coming years will become much clearer.
We observed sequential decreasing rents in Q3 19. As H2 19 should be impacted by low occupancy rates, we keep away from Wereldhave and stick to our negative opinion.
Wereldhave’s negative revaluation (GAV lost 3.7%) was much higher than Klepierre’s and Mercialys’ in relative terms (c. -1% lfl). Here is confirmation of the beginning of a negative sequence in the Continental shopping malls’ universe.
Wereldhave posted nice Q1 19 lfl figures at first glance. From Q2 19, the performance should revert to an underlying less positive trend after the momentary positive impact of the pipeline’s full completion.
Wereldhave’s trading statement for Q3 18 shows a decreasing rental income for the first three quarters of FY18 to €167.4m (-1% yoy), due to lower rental income in France. The negative impact of gross rental income from disposals in 2017 has been offset by income growth in the Netherlands and Belgium. The occupancy rate increased by 0.1% in Q3 18, to reach 96.2% at September 2018 (+0.7% yoy), pushed by an improvement of 20bp in the Netherlands and 10bp in the other countries. Overall footfall inc
Wereldhave released its FY17 results, posting a net profit of €84.3m, down by 30.2% yoy. Gross rental income amounted to €223.4m, dropping by 3% compared to FY16, mainly due to a substantially lower rental income in France and disposals in the Netherlands. The value of the total investment portfolio amounted to €3.8bn. Overall, the results are below our estimates.
GRI stood at €207m, a jump from €126m in FY14, mainly coming from massive acquisitions: a portfolio of 6 shopping centres in France (from Unibail end-2014) and 9 additional shopping centres acquired from Klepierre in the Netherlands in 2015.
Net profit increased to €27m and EPS at €3.23 gained 9% yoy and the dividend proposed at €3.01 per share is up 5% and exceeds our expected €2.87.
Wereldhave also exited the office segment in France, with the disposal of the three remaining assets for €
Wereldhave has announced the acquisition of a 9 shopping centre Dutch portfolio from Klepierre for €730m, consisting of €687m for operational properties and €43m for the development (in the CityPlaza). The assets acquired at a 6.2% yield are expected to contribute as much as €45.1m to NRI from 2016. 25 professionals will be joining Wereldhave from Klépierre (o/w 15 entirely dedicated to the new portfolio). The transaction is expected to be EPS accretive as soon as 2016.
To finance the acquisiti
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
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TMT Investments PLC have provided a portfoloio update. We have published research on this which is attached and a snapshot of the research is below.
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