2024-05-07 11:19:34 ET
Summary
- Unibail-Rodamco-Westfield has significantly outperformed European and global real estate ETFs so far in 2024.
- From an operational perspective, the company saw an excellent start to 2024, with occupancy, tenant sales, and footfall all improving.
- Smart hedging has kept the cost of interest at just 1.8%, but with an average debt maturity of 7.8 years, refinancing is inevitable.
- Despite recent disposals, net debt still accounts for 66% of enterprise value, with the EPRA LTV of 54.4% elevated as well.
- I am neutral on the shares as the market cap rate of about 5.55% is unattractive, despite interest rate hedging and operating momentum.
Introduction
I previously covered Unibail-Rodamco-Westfield ( OTCPK:UNBLF ) in January 2024 arguing the company's share price would benefit from lower ECB interest rates. So far in 2024, the stock is up close to 20%, significantly outperforming the iShares STOXX Europe 600 Real Estate UCITS ETF which is down in the low single digits. Furthermore, Unibail-Rodamco-Westfield, or URW for short, has significantly outperformed the Vanguard Global ex-U.S. Real Estate Index Fund ETF ( VNQI ) in 2024:
URW vs VNQI in 2024 (Seeking Alpha)
Read the full article on Seeking Alpha
For further details see:
Unibail-Rodamco-Westfield: Recent Outperformance Has Frontloaded Gains (Rating Downgrade)