Unibail-Rodamco, Europe鈥檚 largest listed commercial property company with 鈧�35 bn of assets, reported net profit increased by 8.3% to 鈧�1.07 bn in 2014 from 鈧�986 mln a year earlier.
Unibail-Rodamco, Europe鈥檚 largest listed commercial property company with 鈧�35 bn of assets, reported net profit increased by 8.3% to 鈧�1.07 bn in 2014 from 鈧�986 mln a year earlier.
The rise was driven largely by strong like-for-like growth in the group's largest asset classes - shopping centres and offices - as well as the acquisition of a stake in Germany's CentrO in May 2014 and a low cost of debt at 2.6%.
The company鈥檚 recurring earnings per share for the full year increased to 鈧�10.92 from 鈧�10.22 a year earlier.
'2014 has been synonymous with exceptional achievements for Unibail-Rodamco,' commented CEO Christophe Cuvillier. 'The group's strategy to concentrate on the largest regional shopping centres in Europe has led to the sale of non-strategic assets totaling 鈧�2.1 bn. The stake acquired in CentrO, one of Germany's best shopping centres, and the signing of agreements for prime development projects in Brussels and Hamburg, have confirmed our leadership.'
Despite a deteriorating macroeconomic environment in the second half of the year, Unibail-Rodamco's performance was robust with a 2.4% increase in tenant sales through November and a 3.8% rise in like-for-like net rental income compared to 2013.
The vacancy rate at end-2014 stood at 2.2%, down from 2.5% at the end of 2013.
Since 2009, Unibail-Rodamco has worked to reshape its portfolio to focus on very large shopping centres and in 2014 sold over 鈧�2 bn of assets, reaching its five-year target in less than 12 months. As a result, the average gross market value of a Unibail-Rodamco shopping centre has more than doubled to 鈧�395 mln from 鈧�172 mln previously.
The group raised 鈧�6.5 bn of medium to long-term debt through diversified sources of funding and currently has a loan-to-value of 37%. Unibail-Rodamco's average cost of debt reached a new record low of 2.6% in 2014, down -30 bps from 2013. The group has ample liquidity, with 鈧�4.9 bn of undrawn bank lines.
The group signed two major development contracts in 2014; Neo in Brussels, Belgium, which includes the 114,000 m2 Mall of Europe, and 脺berseequartier in Hamburg, Germany, where the City of Hamburg and Unibail-Rodamco will develop a total of 184,000 m2 in the HafenCity area. The estimated total investment cost of the group's development pipeline amounted to 鈧�8 bn at end-2014, compared to 鈧�6.9 bn a year earlier.
For 2015, the group expects the underlying recurring earnings per share to grow by between 6% and 8%. As a consequence of the 2014 disposals, and as a result of the further disposals the group plans to make in 2015, recurring earnings are expected to reach 鈧�10.15 to 鈧�10.35 per share in 2015.
For the 2016-2019 period, the combination of robust like-for-like growth prospects, the streamlining of the group鈥檚 portfolio, deliveries from the development pipeline and the projected low cost of borrowing, have led the group to raise the outlook for its recurring earnings per share to between 6% and 8% from between 5% and 7% previously.
