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Westfield braces for tough second quarter

Property firm Unibail-Rodamco-Westfield (URW) has said the coronavirus pandemic only had a “limited effect” on revenue in the first three months of 2020, but warned the impact will be felt more deeply in the second quarter.

Turnover for the first quarter rose by 1.8% to €956.6m (£834.2m), mainly due to property development and project management revenues in the UK. This was partly offset by disposals completed in 2019 and the mandated cancellation of major events in March due to the Covid-19 coronavirus

The group’s shopping centre turnover grew by 0.8% to €673.9m (£588m) in the period. The proportionate Gross Rental Income (GRI) of the shopping centre division increased by 0.8% to €679.1m (£592.2m). 

As a general policy, in markets where rents are billed quarterly in advance, URW has moved temporarily to billing rents monthly during the coronavirus pandemic. 

URW said it will support its tenants through the crisis through a combination of rent relief and deferral. During lockdown, it has also reduced service charges at its shopping centres “as much as possible”. 

“Covid-19 had only a limited effect on the group’s Q1 turnover as rents are billed and paid quarterly in advance in most of Europe and monthly in the US,” the company said. 

”The impact of the pandemic will be reflected as of Q2, although at this time it is too early to reliably estimate such impact on the group’s results for 2020.”

From 20 April, “progressive” store reopening has started in Germany. Austria is expected to follow on 2 May, Poland on 4 May, France, the Czech Republic and Denmark on 11 May, and Spain between 24 May and 3 June.

URW said a number of governments in the regions where it operates have taken steps to gradually lift the restrictions imposed.

It added that it is ready to safely reopen its centres and comply with all applicable health and safety regulations – for example, limiting visitor numbers, waiting lines, social distancing communication, hand sanitiser stations, regular in-depth cleaning, wearing masks mandatory for all staff and the use of fresh air instead of air recycling – as soon as permitted by local authorities.

URW is also preparing, in collaboration with epidemiologists, its own European health and safety standards to be labelled by Bureau Veritas.

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