Unibail-Rodamco-Westfield Sells Gaîté-Montparnasse Office Component for €172.5 Million
URW (URW) Share Update September 2024 Monday 30th
Unibail-Rodamco-Westfield Announces Sale of Gaîté-Montparnasse Office Component
Unibail-Rodamco-Westfield (URW) has announced the sale of the office component of the Gaîté-Montparnasse complex in Paris to a joint venture between Norges Bank Investment Management and Swiss Life Group for €172.5 million.
Instant Summary:
- Sale of Gaîté-Montparnasse office component for €172.5 million.
- Transaction reflects a 4% discount to the latest unaffected book value.
- 12,500 sqm office space, 100% let to Wojo, completed in 2022.
- Transaction expected to complete in Q4-2024.
- URW has completed or secured €0.8 billion of transactions in 2024.
Transaction Details
Unibail-Rodamco-Westfield (URW) has agreed to sell the office component of the Gaîté-Montparnasse mixed-use complex in Paris to a joint venture between Norges Bank Investment Management and Swiss Life Group for a total acquisition cost of €172.5 million. This transaction reflects a 4% discount to the latest unaffected book value.
The 12,500 square meter office space, which is fully leased to Wojo, a coworking operator under the Accor group, was completed in 2022 as part of a major redevelopment project. This redevelopment also includes the URW-owned and operated Les Ateliers Gaîté shopping center, the refurbished Pullman Paris Montparnasse hotel, residential units, and community-oriented retail and amenities.
Completion Timeline
The transaction is subject to standard conditions precedent and is expected to be completed during the fourth quarter of 2024. With this sale, URW has now completed or secured €0.8 billion worth of transactions in 2024, which will reduce the Group’s proportionate net debt by the same amount. Additionally, URW remains engaged in active discussions with potential buyers for a further €0.6 billion of disposals.
Company Background
Unibail-Rodamco-Westfield is a leading owner, developer, and operator of sustainable, high-quality real estate assets in dynamic cities across Europe and the United States. The Group operates 71 shopping centers in 12 countries, including 39 that carry the iconic Westfield brand. These centers attract over 900 million visits annually and provide a unique platform for retailers and brands to connect with consumers.
URW also has a portfolio of high-quality offices, 10 convention and exhibition venues in Paris, and a €2.9 billion development pipeline of mainly mixed-use assets. As of June 30, 2024, URW's €50 billion portfolio is composed of 86% retail, 6% offices, 5% convention and exhibition venues, and 2% services.
This transaction is a strategic move for URW as it aims to reduce its net debt and streamline its portfolio. The sale at a 4% discount to the latest unaffected book value may raise some concerns among investors about the valuation of URW's assets. However, the successful completion of this sale and the ongoing discussions for further disposals indicate URW's commitment to financial stability and portfolio optimization.
Investor Reaction:
Analysts are likely to view this transaction as a positive step towards reducing URW's debt and improving its financial health. The 4% discount may be seen as a minor setback, but the overall strategy of asset disposals is expected to bolster investor confidence in the company's long-term prospects.
Conclusion:
Investors should keep an eye on the completion of this transaction in Q4-2024 and monitor URW's ongoing efforts to secure additional disposals. The company's strategic focus on reducing debt and optimizing its portfolio is crucial for maintaining investor confidence and ensuring sustainable growth.