Morningstar | Slowing Sales Makes it Harder for Unibail to Raise Rents
Unibail-Rodamco is one of the largest global REITs, with EUR 61 billion of commercial property, split 87% in shopping centres, 7% in offices, and 6% in convention centres. In a more technology-enabled world, the challenge is to grow sales when digital retail enjoys a material cost advantage in the traditional fashion categories. The bias towards luxury or aspirational brands has been profitable in recent years, but will be threatened if more of the high-margin sales occur online. The transition of the portfolio to focus more on premium malls is likely to weigh on earnings growth as the group sells weaker, but higher-yielding malls. Development remains a long-term earnings catalyst. Unibail has a development pipeline of around EUR 12 billion. Yields for the developments currently under way and those in the near-term pipeline are expected to vary between 6% and 7.5% and hence be earnings- and value-accretive.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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