The COVID-19 crisis continues to evolve rapidly and several governments in the markets in which Unibail-Rodamco-Westfield (URW) operates have taken measures to contain the spread of the virus. These measures will impact the Group’s operations, according to URW’s statement.
URW’s primary focus is now on protecting the health and safety of its employees, tenants, and visitors, and the Group is carefully monitoring the latest health guidelines issued by the World Health Organization, national, regional, and local governments and adapting its operations accordingly.
At this date, local authorities have required all non-essential stores to close in several countries, including Austria, the Czech Republic and Slovakia. As such, the Group’s shopping centres in many markets are substantially closed (supermarkets, food stores, and pharmacies are typically allowed to open). The Group’s other shopping centres continue to trade as normal for now, albeit with reduced footfall, although URW expects other governments may adopt similar measures in due course.
The Group’s Convention & Exhibition business is also seeing an impact, with the French government currently restricting any events of more than 100 people. The Group’s offices division is not affected at this point.
In light of this evolving situation, URW has taken all precautionary measures needed to ensure its access to liquidity. The Group now has €10.2 billion in cash on hand and undrawn credit lines, which provides it with the liquidity needed to cover all expected funding needs even under an extreme “stress test” scenario.
At this stage, it is too early to determine the situation’s impact on the contractual obligations of the Group’s retailers and other partners or to estimate the effect of any case-by-case support measures the Group may decide on. The Group has started an active dialogue with its tenants on how to address these unprecedented challenges. In addition, URW is actively reducing non-staff expenses, deferring non-essential capital expenditure and will make use of any relevant facilities or arrangements provided by the various national authorities to assist companies through the crisis. The Group is already prepared to increase the scope of these measures if the crisis were to persist for an extended period.
However, considering the uncertainty around this rapidly evolving situation and how long the above preventative measures will need to remain in place, it is not currently possible to estimate the extent of the impact on the Group’s earnings. In weathering these events URW benefits from a geographically diversified exposure and, if required, has access to undrawn credit facilities to manage its liquidity needs, the statement concludes.
