UNBLF - Unibail-Rodamco-Westfield: A Speculative Buy Based On Rerating Potential

• Unibail-Rodamco-Westfield expects tenant sales to return to pre-COVID levels in 2022, occupancy and variable income in the course of 2023, and retail NRI on a run rate basis in 2023.
• URW is one of the cheapest European REITs in terms of cash flow multiple, only 8.3 times its 8.20-8.40 EUR/share management outlook.
• However I estimate the cash flow run-rate should trough at about 6 EUR/share once US operations are sold, and gradually improve to 7 EUR/share once redevelopments are finalized.
• Company plans to reinstate the dividend in respect of the 2023 fiscal year. Tenant sales continued to outperform footfall, reaching 93% of 2019 levels in H2 2021.
• I discuss impacts on run-rate cash flows from US disposals and identified growth opportunities.

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