URW: Increased foot traffic supports shopping centers in the first half of the year

Unibail-Rodamco-Westfield (URW) published its half-year results on July 30, in line with its forecasts. The operating performance of its shopping centers benefited from increased foot traffic, retail sales, and occupancy rates.

The vacancy rate was reduced to 4,1%

Foot traffic at URW shopping centers increased by 2,1% compared to the first half of 2025. At the same time, the turnover of tenant retailers increased by 5,2%.

The vacancy rate fell by 80 basis points to 4,1%, its lowest level since 2017. The group also signed €197 million in guaranteed minimum rents, with an average rental gain of 10,6% compared to previous indexed rents.

At a press conference, Vincent Rouget, Chairman of the Board of URW, emphasized the appeal of shopping centers to Generation Z, defined here as 15-29 year olds, who represent 30% of visitors. He also believes that these assets remain relatively unaffected by the risks of obsolescence linked to artificial intelligence, due to their function as places for commerce, services, and leisure.

Rents are increasing on a like-for-like basis

Shopping centers generated €1,063 billion in net rental income, compared to €1,078 billion a year earlier. According to published figures, this represents a decrease of 1,4%, due to sales. However, on a like-for-like basis, rental income increased by 4,5%.

Gross operating profit (EBITDA) reached €1,161 billion. It decreased by 1,9% as reported, but increased by 5,3% on a like-for-like basis.

Across all activities, net rental income amounted to €1,151 billion, down 2% year-on-year. Excluding the effects of acquisitions, disposals, projects under development and exchange rate fluctuations, it increased by 5%.

Recurring income penalized by asset sales

Recurring net income amounted to €735 million, compared to €772 million a year earlier, representing a decrease of 4,7%. Adjusted recurring net income per share was €4,84, compared to €5,11 in the first half of 2025.

IFRS net income, however, reached €1,009 billion, up 44,6%. This increase was primarily due to a 0,9% revaluation of the real estate portfolio, amounting to approximately €500 million.

Conferences are growing, offices are declining

The Congress and Exhibitions business, which notably includes the Porte de Versailles exhibition center, generated €68 million in net rental income. This represents an increase of 18,1% as reported and 17,1% on a like-for-like basis.

Conversely, net rental income from the Offices and Other division was reduced from €40 million to €20 million. This 49% decrease primarily reflects the sales of the Trinity Tower and the Pullman Paris-Montparnasse hotel.

A €2,2 billion asset disposal program completed

URW has finalized its 2025-2026 asset disposal program, which covers €2,2 billion in assets, including €600 million sold in the first half of the year. The real estate company is now beginning to reallocate its capital towards assets considered strategic.

In the United States, the group has taken full control of Westfield Southcenter and signed a conditional agreement to acquire the remaining 50% stake in Westfield UTC. Vincent Rouget reaffirmed the strategic importance of the US market and indicated that URW remains open to other investment opportunities.

Annual targets confirmed

For 2026, URW maintains its target of adjusted recurring net income per share between €9,15 and €9,30. The real estate company also plans to propose a cash distribution of €5,50 per share, compared to €4,50 for 2025.

These prospects assume the absence of significant deterioration in the macroeconomic and geopolitical environment.

Klépierre also raises its forecasts

Rival Klépierre also reported improved half-year results. Foot traffic in its shopping centers increased by 1,2%, and retailer sales rose by 3,9% on a like-for-like basis. Its net rental income increased by 4,4%, while its EBITDA grew by 4,8%.

Following this performance, Klépierre raised its annual target. The real estate company now forecasts EBITDA of at least €1,15 billion in 2026, compared to a minimum of €1,13 billion previously, as well as current net cash flow per share at the high end of a range of €2,77 to €2,80.

These forecasts are based in particular on the resilience of consumption and the absence of further deterioration in the macroeconomic environment, according to Klépierre's half-yearly press release.