Unibail-Rodamco-Westfield: More Disposals Required, Strong Trading Offers Breathing Space

No-moat Unibail-Rodamco-Westfield secured only EUR 200 million of net debt reduction so far in 2024 via the sale of Equinoccio in Spain and an agreement signed for the disposal of Westfield Oakridge in the United States. Executing disposals at sufficient prices to pay off debt is critical for our URW valuation, and as such, we maintain a High Uncertainty Rating for this REIT. Nevertheless, URW has time up its sleeve, and news revealed in a strong March-quarter trading update supports our view. URW securities remain undervalued, trading 19% below our fair value estimate of EUR 95.50 per security (AUD 7.80 for the Australian-listed securities). However, after an 83% rally from the lows in October 2023, they aren’t as cheap as they were.