French shopping mall giant Unibail-Rodamco-Westfield is reaffirming that it won't sell its retail properties in the United States.
In a press conference announcing 2024 financial results that revealed improving sales performance among tenants and occupancy rates across the firm’s properties, CEO Jean-Marie Tritant said the global retail landlord was indeed backing away from a previously announced plan to exit the U.S. retail landscape. Rather, the firm is keeping its stake in a handful of American flagship malls that generate relatively high revenue for the company.
“On the strength of the transformation we have achieved, we have taken the strategic decision to retain our high-performing portfolio of destination assets in the United States, which will help to strengthen our group's future growth and value creation," Tritant said in a statement.
In 2022, URW unveiled an aggressive plan to sell nearly all its U.S. malls and refocus solely on Europe. But in 2023, the group changed its mind.
URW has been weeding out poor-performing malls from its portfolio over the last several years. Tritant said in the earnings report press conference that the landlord had disposed of more than 17 U.S. properties, bringing in approximately $3.3 billion and reducing the vacancy rate of its flagship shopping centers by more than 6%. “And we have completely restructured our management platform in the country, cutting costs by over 50%,” he said.
As of early 2024, the company had interests in 16 U.S. malls, excluding airport properties, among them Westfield Century City in Los Angeles and Westfield Garden State Plaza in northern New Jersey. One of the malls it no longer owns is the former Westfield San Francisco Centre, where it handed back the keys to the ailing center after anchor tenant Nordstrom departed in 2023, followed by a chain of other retailers who cited safety concerns and declining foot traffic.
Still, most of URW's top-tier malls are generating more revenue than before the pandemic in some cases, making URW less eager to sell off its properties, analysts told CoStar News previously. URW, like fellow mall owner Simon Property Group and other retail property holders, is also redeveloping some retail locations — adding housing and restaurants — to increase foot traffic as well as value.
Barring another pandemic where shoppers are forced to stay in their homes, selling now would equate to leaving money on the table as higher interest rates crimp financing and deals, so there’s no reason for URW to rush into unloading U.S. malls at perhaps prices below what it was seeking, analysts said.