Unibail-Rodamco-Westfield SE (URW) Earnings Call Transcript & Summary

Good evening, and welcome to Unibail-Rodamco-Westfield's half year results presentation. It is a pleasure to be here today at the Palais des Congrès, a venue that is a part of de Paris, our convention and exhibition network, to give you an update on the performance of our business during the first 6 months of 2021. As we shared at the start of the year, we expected operating conditions to be tough across all geographies and unfortunately, they were. In the phase of these ongoing challenges, URW has shown continued resilience, and I want to start by acknowledging the outstanding commitment and tenacity of our URW team during this period. Ongoing restrictions affected our ability to operate throughout the first half of the year,and will continue to do so during part of the second half. Additionally, recent developments in France, the U.K. and elsewhere show that we can take nothing for granted in terms of the pandemic. These developments also underline the value of our ability to adjust and adapt to new scenarios swiftly and decisively. As in 2020, we have seen a good return of both footfall and sales when restrictions eased. And throughout the first 2 quarters, we have maintained our focus on the delivery of our operational and financial priorities, which we will update you on this evening. Also important is our ongoing access to credit markets and ample liquidity, which improved during the period and allows us to drive our deleveraging strategy in a controlled way by maximizing disposal proceeds as markets recover. We have made good progress against the key operational and financial priorities that we set out at the full year. Operationally, we continue to concentrate our efforts and resources on our flagship destinations, which have shown resilience throughout the crisis and remain attractive to established and emerging brands. One major highlight from the first half was the successful opening of Westfield Mall of the Netherlands, 94% let and with high traffic numbers despite restrictions. This new addition to our portfolio demonstrates the strength of our flagship destination strategy. We have maintained our active approach to asset management balancing a variety of factors, including tenant support and a pragmatic approach to short-term lettings that has protected occupancy and will allow us to maintain commercial tension for our assets as conditions improve. I'm also pleased to highlight the appointment of Caroline Puechoultres, who joins the Management Board as Chief Customer Officer and started 2 weeks ago. A broad background in retail, hospitality and digital will help us better address evolving consumer preferences and drive future growth in advertising, data and omnichannel retail. Financially, we have made solid progress on deleveraging. Fabrice will dive into more details on the 4 priorities areas. But in terms of headlines, to date, we have agreed or completed EUR 1.7 billion of European disposals against our EUR 4 billion target. We are streamlining our U.S. portfolio as part of our commitment to deliver a radical reduction in our exposure to the market, pursuing sales of noncore assets and delivering a EUR 346 million reduction in headline net debt in the first half of the year that are voluntary for closures. And we have maintained favorable access to credit markets, as demonstrated by our new sustainability-linked revolving credit facility and secured 36 months of liquidity, a 12-month improvement from where we were at year-end. As we anticipated at the beginning of the year, we have faced tough operating conditions, which are reflected in our results. For Convention & Exhibition, the first half was just tough as 2020 with all locations effectively closed. In recent weeks, we have been able to reopen and host some events, notably Start-up and Innovation Conference, Vivatech, which had to operate at approximately 20% of its usual in-person attendance. Bookings have started to return, mainly beginning Q4 of this year. More positively, we are seeing a major improvement for the first quarter 2022, with the team having achieved to date 70% of our usual level of advanced bookings. For offices, our net rental income was down 24%, reflecting the impact of the SHiFT and Les Village buildings disposals. I'm happy to announce that we have signed a promissory deal of sale and leaseback of our group headquarters in Paris at a net disposal price of EUR 248.6 million, a premium to the last unaffected book value. We completed as well the first leasing deals on the Trinity Tower in La Défense at rent levels that met our pre-COVID expectations. The signings, notably with Technip, confirm the superior quality of Trinity and give me confidence that we will lease the entire project according to plan. For shopping centers, at a high level, our NRI is down 25%, mainly due to disposals and rent relief granted to tenants during the COVID crisis, but we are seeing an encouraging return of footfall, sales and letting activity. It all starts with understanding the operating conditions for shopping centers in the first half of 2021, which were even more challenging than the same period last year. If you remember, the start of 2020 featured over 2 months of normal activity, approximately 70 days in total before the first lockdown in March. In contrast, we have had in the region of 40 days of operations under what we would consider limited or light restrictions in the first half of 2021. Europe, sorry, which represents 74% of our retail GMV, remained closed for almost a quarter in the first half, and we faced stringent capacity limits along with other severe restrictions at our reopened U.S. centers. While the number of closed days were broadly the same at a group level, behind the numbers, we experienced very tough conditions with market-by-market closings, restrictions and other impediments to operations. Against that backdrop, URW continue to work closely with its tenants to manage the impact of COVID-19 and protect occupancy levels and key relationships for the long term, granting EUR 220 million in rent relief. This is an average of 1.5 months of rent. This being said, our fair burden-sharing approach to negotiation doesn't allow change to the lease structure. Obvious we go into the financials and accounting impact, but overall, our approach has allowed us to clean up most of the backlog from 2020 and to reach a collection rate of 89% of the amount due. We also continue to navigate different and fast-evolving legislations, impacting our business and that of our tenants. This is taking place on a country-by-country basis and in some markets on the federal as well as local level. As an example, in France, we await the outcome of legislation announced in February on government support for retailers, which has impacted our H1 collection rates as some tenants without payments until resolved. As another example, in the U.K., all restrictions have been lifted and business has resumed, but we faced the extension of their COVID eviction moratorium to March of 2022. In this changeable environment, the main driver of traffic, as shown on this graph, is unsurprisingly the full reopening of centers. The lower the restrictions, including stay-at-home orders, the higher the traffic and sales. Globally, we have been consistently trading at around 50% of sales and footfall in the first 4 months based on the U.S. being fully open and mainly essential stores trading elsewhere. Once we saw a drop in restrictions in May, we saw a jump in traffic and sales and a further improvement in June when all centers reopened and restrictions were further eased. High levels of vaccination, which we hope will be achieved in all geographies in the fourth quarter, will bring further operational stability and the return of office populations. To give you a snapshot of performance recovery, reflecting here are footfall and sales in Europe compared to 2019 for the month of June, the first full month we were open with restrictions after several months of closures. Overall, after just 1 month, we are back to over 75% of 2019 footfall though you can see the U.K. is a little bit behind due to our assets connection to public transportation networks and proximity to office locations. As in 2020, we find a pattern where sales outperformed traffic by an average 10 points, with sectors such as Jewelry and Sport already close to or above 2019 levels with Health and Beauty not far behind. Some categories are lagging such as Fashion, and Food and Beverage, which is still subject to specific restrictions in some markets. It is interesting to look at the U.S. as an indicator of recovery trends as restrictions were lifted earlier than in Europe. Overall, U.S. footfall for June is at 75% versus 2019, primarily impacted by lower office traffic around our CBD centers, such as Westfield Century City in Los Angeles, our Westfield San Francisco Center. As you can see on the left, sales have been improving significantly from 69% in January to 100% overall of 2019 levels in June and even 107% for those centers less impacted by the slow return to offices. If we look in detail, driving this growth is Luxury, Home and Jewelry that are respectively at plus 45%, plus 27% and plus 23%. In June, Fashion and Food & Beverage figures approach 2019 levels far better than their year-to-date performance. Overall, all sectors outperformed their year-to-date figures in June. These trends paired with stable operating conditions in the U.S. and Europe give us confidence that we will see a return to 2019 traffic and sales levels in the course of the fourth quarter, given stable operating conditions with no new restrictions. While we are talking about the U.S., I also want to highlight that the COVID crisis there has not been managed as one market with a uniform set of restrictions. While general guidance is provided by various federal agencies, states ultimately make their own determinations as to the restrictions or policies they implement, which can be more severe than the guidelines. Counties based on individual state law could, in some instances, be even more restrictive. The map shows the stringency of U.S. State restrictions using data from the University of Oxford. We can see that limitations were generally most severe in the states where our assets are primarily located, meaning California, New York and New Jersey. As an example, in California, indoor dining was closed until March 11, 2021, so for almost the first quarter, and was then only allowed to reopen at 25% capacity. Whereas in Texas, where we don't have any assets, restaurants were open from May of 2020, and all capacity limits were removed on March 10, 2021. This context illustrates that our U.S. business delivered solid performance in light of the broader macro environment. Now, let's look at our leasing activity, where total volumes for the period were on par with H1 2019 levels. Conditions could not be described as landlord-friendly, with a variety of changes, including increased closures, tougher negotiating conditions, tenant bankruptcies and retail streamlining their store portfolios. In this environment, we adapted our leasing strategy. And since the second half of 2020 have been focused on mitigating the vacancy level and maintaining commercial appeal while ensuring the long-term health of the portfolio. To achieve this, there is a need to move very fast, particularly in the face of the trend of longer tenant negotiations that started before COVID. Fabrice will go into the numbers in more detail, but we have prioritized shorter lease terms to protect our long-term position resulting in lower MGR expectations in concert with a higher turnover rent. These deals, which represent 56% of our leasing activity for this period, have an MGR impact of negative 13.8% and a rate duration of 23 months and are mostly renewals, allowing us to move fast. And as you know, MGR figures do not take into account the variable part of the rent, which in light of the sales performance we are seeing as we emerge from the COVID crisis should partially offset the gap in total leasing revenue. With long-term leases, we see a slight MGR uplift of plus 1.3% and an average lease duration of 7.5 years. This leasing activity is balanced with 51% of the MGR signed on new tenants. These long-term tenants, which include world-class brands, like Apple and Nike, continue to invest significantly in physical retail as part of their omnichannel strategies. With the impact of the pandemic, they are even more focused on the right locations in the right markets and the need for long-term leases to protect these investments. These brands continue to see URW as their partner of choice, giving them access to the best catchment areas in the most important trade areas in our geographies. To highlight this point, with the specific category, we were proud this first half to announce the signing of a flagship Hermès store at our Westfield Topanga extension project, which together with Yves Saint Laurent Westfield Galleria at Roseville, extend and elevate our luxury offer in our U.S. flagship centers. And just today, I'm excited to share that we signed premier German fashion and lifestyle department store Breuninger to anchor our Westfield Hamburg project with a 14,000 square meter flagship. As communities have reopened in the last 6 months, the sense of gathering together socially has taken on greater importance. In this period, we have rolled out a series of experience-based pop-up activations, such as Miss Voon, a rooftop restaurant and vape club at Westfield Mall of Scandinavia and the rollerskating Rink at Westfield Century City, allowing us to capitalize on immediate demand for these social entertainment experiences. We have also then secured this with a number of exciting new long-term tenants that will expand this offer, including Pinstripes in the U.S., a luxury dining and bowling concept, and Karls at CentrO in Germany, a unique theme park. Consumers continue to embrace this concept, and we're excited to have made significant progress in establishing our Westfield centers as the place to find new leisure and experience concepts now and in the future. The projects we delivered in the first half of the year are also illustrations of the experiential places we are creating across our portfolio. The Mall of the Netherlands opened in March and is truly first-of-its-kind destination in the country exceeding retailer and customer expectations. The property is 94% let with 280 stores and restaurants, including Zara and 4 other retailers and brands that are already within the top performing outposts for them locally. In March, we opened the 10,000 square meter fashion premier La Maquinista in Barcelona, which is 100% let, adding new restaurants and retail, including the first Dyson and only Abercrombie & Fitch in Spain and the second Urban Outfitters in the country. At La Part-Dieu in France, we inaugurated a dining entertainment district called the Rooftop in June, featuring 25 new restaurants, the very first local food society food hall and the leisure complex composed of an indoor and outdoor climbing facility and a new 18-screen UGC cinema that will open in September. Before we move on, let me show you a quick video to give you a flavor of the experience and offer at Westfield Mall of the Netherlands. [Presentation]

I hope you enjoyed the tour. Westfield Mall of the Netherlands is our biggest delivery in Europe since the Mall of Scandinavia in 2015. Based on May and June footfall, it is on track to reach 12 million visits a year. We are immensely proud of this iconic destination and look forward to welcoming you there soon. Now back on to the U.S. During the first half of 2021, we have been very active in streamlining our U.S. portfolio, completing the foreclosures of 4 assets that delivered a reduction of headline net debt of EUR 346 million. We see some investment appetite for regional assets and have engaged in disposal negotiations for a number of centers, and we hope to be in a position to complete this transaction in the coming months. Meanwhile, we are actively working to strengthen the quality and attractiveness of our U.S. flagship portfolio through accelerating leasing and big box conversions. We have also launched 2 RFP processes to team up with residential developers for our Westfield Garden State Plaza and Westfield Montgomery densification projects. This will unlock land value and strengthen our assets for the future. As announced, we have set up a dedicated taskforce to implement our U.S. disposal program, which has made significant progress in assessing the best options to deliver a radical reduction of our exposure to the market. The U.S. economy is rapidly recovering. We still have work to do, but we are well positioned to be able to execute when investment markets reopen. Moving now to CSR. Our Better Places 2030 strategy is core to everything we do. We have continued to work towards our objectives, which has been validated by ESG ratings, such as Sustainalytics and Euronext. We have worked even harder to support the need for of our communities in response to the pandemic, partnering locally with organizations and governments to bring vaccination hubs into our shopping centers and convention and exhibition venues with over 0.5 million doses administered at our sites globally. Our Better Places strategy also support our financing goals as demonstrated by the 5-year EUR 3.1 billion sustainability-linked revolving credit facility we recently signed, which Fabrice will cover in more details in his presentation. Fabrice, the floor is yours.

Thank you, Jean-Marie, and hello, everyone. As we expected, the group's H1 2021 performance was significantly impacted by pandemic-related restrictions. As shown by Jean-Marie, there were more days of closure than days of operation across Europe in the first half. And even when our shopping centers were able to operate, a number of restrictions still applied. This obviously had a negative impact on our H1 results, driven primarily by the rent relief granted to our retailers. Despite these challenges, we saw a number of positive indicators during this half. Strong tenant sales after reopening in June, a recovery in leasing activity exceeding the pre-COVID level of H1 2019 by volume, low vacancy levels in our core Continental Europe portfolio and significant progress in our disposal program. So how do these extreme conditions translate in the group's H1 2021 results? The adjusted recurring earnings for H1 2021 stands at EUR 3.24 per share compared to EUR 4.65 per share for H1 2020. This 30.4% decline reflects the significant impact of lockdowns, leading to a 22.4% reduction in net rental income on a like-for-like basis for the whole portfolio primarily in the retail and the cine sectors. It also includes the impact of disposals completed in 2020 and H1 2021 with an impact of minus 6.5%. To give you now a better sense of the COVID-19 impact on our results, we have broken down the major drivers of our AREPS performance. The combined COVID-19 impact amounts to EUR 1.10 per share. This represents 78% of the total EUR 1.41 per share loss in AREPS between H1 2020 and H1 2021. This figure is made of EUR 1.21 per share of rent relief signed and expected to be signed, partly compensated by lower doubtful debtor provisions. It also includes a decrease in convention and exhibition net operating income and an increase in the cost of debt due to the high liquidity levels raised to support our wider deleveraging efforts. In addition, the mechanical impact of 2020 and H1 2021 disposals was EUR 0.30 per share. Moving on to like-for-like retail NRI on Slide 21. NRI for shopping centers on a like-for-like basis was down by 21.8%, 83% of this decrease is from rent relief. NRI like-for-like was also impacted by net closures, renewals, relettings, representing a decrease of 7%. As in 2020, this performance varied between geographies. NRI was down 31% in Continental Europe, primarily driven by rent relief and doubtful debtors. As Jean-Marie mentioned earlier, the number of days closed versus last year was 60% higher at 91 days versus 57 days last year. U.K. NRI was down 10% as a result of rent relief granted, increased vacancy and the impact of CVAs. This was partly compensated by lower doubtful debtor provisions, thanks to better rent collection, and a positive evolution in sales-base rents and parking income as well as an insurance claim covering the loss of activity due to COVID, all this being captured in the other category. And finally, U.S. NRI on a like-for-like basis was flat, thanks to reversal of doubtful debtor provisions, offsetting rent relief granted and the negative impact of vacancy and downlift. Let's focus now on rent relief and expand on Jean-Marie's earlier comments. In H1 2021, we granted EUR 220 million in rent relief compared with EUR 33 million in H1 2020 and EUR 313 million for the full year 2020. This amount is significantly higher than in H1 2020 due to a number of factors. The accounting approach is the main one. Since full year 2020, we have booked both signed and expected to be signed rent relief based on the principle of a fair sharing of the lockdown burden, while we only accounted for effectively signed reliefs in H1 2020. Negotiations and agreements with tenants have progressed significantly and now stand at 80% for rent relief relating to 2020. The accounting impact of EUR 183 million is lower than the cash impact due to the application of IFRS 16, requiring the straight lining of the rent relief for which we received a concession from the tenant. In total, the majority of rent relief around 83% was taken in H1 2021 P&L. Rent collection was another major area of focus for the group during the half. On the basis of the rents due after excluding the rent discounts we discussed earlier, H1 2021 rent collection stands at 89% for the group. It was 87% for Continental Europe, 94% for the U.K. and 92% for the U.S. Based on all rents invoiced, rent collection stands at 73% for the group. The level of collection was impacted by the lockdown and other restrictive measures taken by governments, including moratoria in the U.K. and U.S. In Continental Europe, the collection rate stood at 69% with lower collection in the second quarter driven by France where retailers delayed rent payments in expectation of the government support package. Rent collection was high in the U.S., reaching 80%, but was still impacted by the moratorium and force deferrals in certain counties. In the U.K., rent collections stood at 77%, with a marked increase as soon as retailers were allowed to trade again. This is a positive sign for the second half following the lifting of all restrictions in this market. It is also consistent with the positive evolution we saw last year when centers were allowed to reopen. For the rest of these amounts, effectively due, the group maintained a conservative approach to bad debt provisions. Bad debt provisions amounted to EUR 65 million for shopping centers representing 6.5% of gross rental income. Let's talk now about bankruptcies on Slide 24, where we saw a positive evolution. H1 2021 saw lower bankruptcies than 2020 with 210 stores impacted, i.e., 46% less than in H1 last year. These 210 stores represent 1.8% of total stores. The level of bankruptcies is in particular less pronounced in the U.S. with 1.2% of stores impacted, thanks to an overall improvement in the environment and in sales performance. Thanks to the quality of our assets, tenants remain in place or were replaced in the majority of the cases, representing 83% of the units affected. The annualized leasing exposure of these bankrupt tenants remaining in URW's centers corresponds to 1.1% of the gross rental income. Bankruptcies in 2020 and in H1 2021 as well as tenants that did not reopen after the H1 lockdowns had an impact on vacancy levels. At the group level, vacancy rose from 8.3% in December 2020 to 8.8% in Q1 2021 and then stabilized in Q2 at 8.9%. There were once again clear differences between regions. For Continental Europe, Q2 vacancies were down on Q1 2021 and broadly in line with full year levels at 5%. The U.K. saw an increase in Q1 due to the lockdowns, followed by a slight improvement in Q2. Vacancy, nevertheless, remains impacted by tough market conditions and the relative size of Westfield London. The U.S. saw a slight increase in vacancy from 13% to 14% between December 2020 and June 2021, particularly at our central business district assets that are most impacted by homeworking. The number of leases signed significantly increased in H1 2021, exceeding even the pre-COVID level of H1 2019. As highlighted by Jean-Marie, the group signed new leases or renewals with a number of premium brands, who continue to invest in flagship space and concepts at URW centers. In total, URW signed 1,218 deals, up 84% compared to H1 2020 and up 3% versus H1 2019. Leasing activity was particularly strong in the U.S., 77% above 2020 levels and 30% above 2019. This included a higher proportion of renewals on short-term deals. Europe as a whole saw 663 leases, up 91% compared to H1 2020. As Jean-Marie indicated, our current leasing strategy balances short-term deals of between 12 and 30 months to reduce vacancy, while ensuring we continue to generate uplift on longer leases to preserve the long-term value of our assets. In H1 2021, short-term deals represented 56% of total leases signed. This was 72% in the U.S., reflecting local vacancy levels, and 45% in Continental Europe. This 56% represents an increase versus 2020 when short-term leases represented around 44% of leasing activity. The uplift on these short-term deals was minus 13.8% for the group, including minus 6.8% in Continental Europe, minus 12.8% in the U.K. and minus 19% in the U.S., reflecting tougher bargaining conditions. The uplift for deals above 3 years was 1.3% -- plus 1.3%, made of plus 2.2% in Continental Europe, minus 1.3% in the U.K. and positive 2.9% in the U.S. This demonstrates the long-term appeal of our assets and retailers' increased confidence in the outlook. Moving now to the office segment on Slide 28. NRI is down 24% due to the disposals of SHiFT and Les Villages buildings and the Lyon Confluence Hotel with a total impact of EUR 11 million. On a like-for-like basis, NRI is positive in France and down slightly on H1 2020 on a group basis. Trinity Tower in La Défense, which was delivered at the end of 2020, is now 21% let with 2 leases signed in H1 2021. Convention & Exhibition activity remained on hold in H1 with restrictions on events for the majority of the period. Until May 19, no events were authorized. And since then, activity resumed but with significant capacity restrictions, which were only removed on June 30. As a consequence, NRI was down 97%, while net operating income was negative. With restrictions lifted at the end of June, there is positive news from Q4 2021 and Q1 2022 bookings and prebookings reaching levels of around 70% of normal years. Activity is expected to return to normal in 2023, where we also expect to benefit from the Paris Olympics from H2 2023 onwards. Moving now to portfolio valuation. The main drivers for H1 2021 were the disposals achieved and like-for-like revaluation. Our portfolio values stand at EUR 55 billion, a 2.4% reduction versus year-end 2020. This is due to minus EUR 1.4 billion of disposals and foreclosures, a decrease in like-for-like value of EUR 1.1 billion, mainly attributable to retail, and I will come back on this. And this decline was partly offset by CapEx of EUR 0.6 billion, and a positive ForEx exchange impact of EUR 0.6 billion, with the strengthening of the U.S. dollar and sterling against the euro between December 2020 and June 2021. The like-for-like value of the retail portfolio decreased by EUR 1.1 billion or 2.5%, as I mentioned earlier. As you can see, there are significant differences across regions. Shopping centers in Continental Europe, which represent 68% of the gross market value of the retail portfolio, were down 1.7% with valuations supported by transactions completed by URW during H1 2021. U.K. valuations, which represent 6% of the retail portfolio, were hardest hit, down 9%, reflecting market uncertainties. The total decrease in valuation over the past 3 years is now around 40% for the U.K. U.S. assets were down 3% with U.S. flagship broadly in line with Europe, while regional assets were more impacted. Overall, for the whole portfolio, appraisers increased both the exit cap rate and the discount rate by around 10 basis points. In addition, they reviewed the cash flow projections and in particular, the exit year NRI, which would have decreased compared with year-end 2020. It was minus 7% in the U.K. after minus 8% in 2020 due to the challenges in the U.K. retail market; minus 2% in the U.S. after minus 10% in 2020, reflecting a stabilizing market; and flat in Continental Europe in a market where vacancy remains stable and rental uplift was almost flat. Looking now at how this translates in terms of NRV on Slide 32. The EPRA net reinstatement value stands at EUR 162.4 per share at June 30, 2021. The 2.6% decrease results mainly from the like-for-like revaluation of assets and is partly offset by retained profit, positive FX impact and positive non-like-for-like valuations driven by gains on disposals, the revaluation of operating assets as well as the revaluation of Mall of the Netherlands after its successful delivery. Moving now to financial ratios. The loan-to-value was positively impacted by the decrease in net debt resulting from our deleveraging progress. IFRS net financial debt stands at EUR 23.5 billion at the end of H1, down from EUR 24.2 billion at year-end 2020, despite a negative FX impact. This figure is EUR 23 billion on a pro forma basis for the disposals agreed but not completed at the end of June, namely the disposal of the 7 Adenauer office building expected to close in Q3, and the sale of a 45% stake in Shopping City Süd completed and cashed-in on July 21st. Thanks to this debt reduction and despite the decrease in value mentioned, the LTV decreased slightly from 44.7% at the end of 2020 to 44.4% at the end of H1 2021. This rolls further to 43.7%, if you factor in the signed disposals. On a proportionate basis, the LTV stands at 46% and 45.4% pro forma for the same disposals versus 46.3% last year. Lower EBITDA down 25% compared to last year as a result of the significant rent relief booked in H1, obviously, had an impact on cash flow related credit metrics. Interest coverage ratio decreased from to 3.5x to 2.9x. Funds from operations over net debt dropped from 4.8% to 4.3%. While this is above our debt covenant, the group has obtained a waiver from its lending bank, should this covenant be breached temporarily in 2021. Our net debt-to-EBITDA ratio, which is not part of the group's debt covenant package, stands at 16.6x versus 14.6x last year. But as our debt continues to decrease and our EBITDA recovers going forward, we expect to see significant improvement in these ratios. As mentioned in February and reiterated by Jean-Marie earlier, deleveraging remains the key financial priority for the group. We set 4 actions to achieve this objective and have made significant progress on each of these in the course of H1 2021. This includes progress on our European disposal program, evaluating all options to deliver a radical reduction in our U.S. exposure, including the ongoing streamlining of our U.S. regional portfolio, reducing our pipeline through deliveries, reducing our CapEx spending versus previous years and, of course, suspending the dividend. We are committed to delivering this process in the most orderly and efficient way, and we can make this commitment, thanks to our strong liquidity position and undrawn credit facilities. They were extended in H1 2021, thanks to the financing activity during the period. Disposals are a key component of our deleveraging strategy. As a reminder, we committed to dispose of EUR 4 billion of European assets by the end of 2022. As mentioned previously, we have agreed or completed EUR 1.7 billion of disposals from both our office and retail portfolios, over 42% of our disposal target in Europe. These disposals were achieved at a 7% premium to last appraisals, including plus 13.5% for offices and minus 1.6% for retail. We have identified the remaining assets for disposals and are confident that the quality of these assets will support this process. In addition, voluntary foreclosures were completed on 4 U.S. regional assets. These assets were operating significantly below the average quality of our U.S. portfolio in terms of occupancy and sales intensity. As a result of this process, these assets and $346 million of nonrecourse debt attached to them are no longer on our balance sheet. Moving now to the development pipeline on Slide 37. This has been further reduced to EUR 3.8 billion in June 2021 from EUR 4.4 billion in December 2020. This is primarily due to the successful delivery of Mall of the Netherlands, the fashion pavilion extension in La Maquinista and 2 department store conversions in the U.S. Of our EUR 3.8 billion pipeline, EUR 2.3 billion is for committed projects divided between EUR 1.3 billion invested to date and EUR 1 billion that remains to be spent. No major projects were added to the pipeline in H1 2021. And the group will only consider launching control projects after completing its deleveraging program or with partners that would allow the group to reduce its capital allocation on these projects while generating development or management fees. H1 2021 CapEx amounted to EUR 0.6 billion, in line with the group's intention to limit its CapEx to a maximum of EUR 2 billion for 2021 and 2022. And as we said in February, the group will continue to raise funds on an opportunistic basis. During H1, we raised EUR 1.25 billion of bonds at attractive rates with an average coupon of 1.05% and a 10-year average maturity. The group also worked on the extension of its existing credit facilities. EUR 3.35 billion of credit facilities were signed, including the EUR 3.1 billion sustainability green revolving credit facility, the largest green RCF in the sector in Europe. This facility included EUR 700 million of new money. Thanks to these signings, the group now has EUR 9.8 billion of credit facilities and extended its average maturity to 2.7 years at the end of June, up from 1.9 years at the end of 2020. In total, the amount of cash plus the credit facilities stand at EUR 12.5 billion. This covers the group's funding needs for the next 36 months before any additional debt is raised or disposal completed, i.e., 12 months longer than our position as of December 31, 2020. This puts the group in a position to execute its disposal and deleveraging program in the best possible conditions. That's all from me, and I will now hand back to Jean-Marie for some concluding remarks.

Thank you, Fabrice. We are cautiously optimistic given our progressive recovery of footfall and tenant sales as restrictions are eased, and given our solid leasing activity that demonstrate the commercial appeal of our assets. We remain fully focused on our operational priorities and totally committed to progressing our deleveraging plan in the second half of the year. Due to the ongoing COVID impact and the ongoing risk of further restrictions, we are not in a position to offer guidance for the second half. We expect conditions to stabilize in Q4, and 2022 will be the year of recovery built on our portfolio of flagship destinations in the best locations and the increasing strength of the Westfield brand. Thank you for your attention. And now let's open the floor for questions.

[Operator Instructions] The first question comes from Sander Bunck from Barclays.

Couple of questions for me. Firstly is on guidance, and I appreciate it's a bit too difficult to say something on FY '21. But since you mentioned a couple of times that 2022 would be the year of recovery, I was just wondering if you could give any sense based on the disposals that you've done currently, kind of 100% assume collection rates, et cetera, what kind of AREPS you would potentially be looking at? The second one is on the U.S. And I think you mentioned that you have a couple of options under consideration. And I was just wondering if you could give a bit more detail in terms of how you're looking to materially decrease your exposure there? And lastly, was on the financial cost of debt that I think is now at the moment back towards 2015 levels. Just if you could give a bit more of a sense there, what do you expect there to happen going forward and what the drivers are of that number?

Okay. Maybe I will give the question on the guidance for Fabrice. I would start with the U.S. disposals. The discussions I was referring to during the presentation about regional malls for which we received unsolicited offers in particular on one asset where we decided then to organize the tender as we received 3 different offers from 3 different investors, 3 different type of investors. So -- and looking at the price that we were offered, we consider that would be maybe wise to organize this tender. We have other direct off-market discussions as well on regional malls that are part of this strategy to really streamline our portfolio, as we did for the foreclosures of assets that we gave back to the landlords or the services in Florida. So we are really working on that. While in the meantime, we see our flagship assets getting back on track in terms of sales as we have reached 100% in volume of the sales of 2019 in June, even if the traffic is back at 75% due to this still homeworking policy that is applying in the U.S. We expect the market to reopen in terms of investment more in '22. We see some first financing -- mortgage financing on some very qualitative assets that give us confidence that in '22, we should face a more favorable market even if not everything would be fully reopened. So the focus for this year was streamlining our portfolio and working on the options. As we said, we set up a taskforce to really work on it, look at all and every option, such as we would be ready when the markets will reopen. So this is where we are on the U.S. disposal program.

So regarding your question on the guidance, at the end of the quarter and more precisely, the semester, we saw a number of positive evolutions in terms of sales -- retailer sales in terms of footfall upon reopening in June. We saw also as well in the semester good leasing activity recovering, limited vacancy. But despite this, we still have a number of uncertainties and in particular, with the development of new variant and the uncertainty that this raises in terms of actions by governments that could be put in place to fight against this variant. And I guess, one of the example is the law that was passed in France and, of course, which we are discussing with the need to have other vaccination certificate or sanitary pass or proof of absence of infection to enter shopping centers. And so at the end of the day, this relates to a number of uncertainties or this creates a number of uncertainties not to mention as well the uncertainty around the support of the French government, which, as you've seen, has had a negative impact in terms of rent collection in the second quarter. So all these uncertainties lead us to a decision or make us consider that it's not appropriate to give a guidance at this stage. And of course, as soon as we have better visibility as the situation stabilizes, in particular with the rollout of the vaccine, we'll be able to communicate to you. But at this stage, we felt it was not appropriate. One point to mention is that effectively, as you've seen, the COVID-19 had a significant impact again through the lockdowns in terms of rent relief, that is the main explanation. 83% of the like-for-like NRI performance, which gives you a sense for the impact of this COVID-related and this extraordinary situation that we have suffered from in H1 2021. Sorry, Sander, what was your third question on financial covenants?

Yes. So it was not on covenants. It was on the cost of debt that has continued to increase, yes.

Cost of debt, sorry. So I think the -- one of the impact of the crisis, in particular, the wider plan to deleverage the company is that in order to do that in the most orderly and efficient way, we have gathered additional liquidity, and we have today in our balance sheet EUR 2.7 billion of cash. And of course, this has a significant impact on our cost of debt, in particular, in Europe. As a reminder, usually, we used to have around EUR 500 million to maybe EUR 600 million of cash position, which, by the way, at that time, was still positive in terms of conditions of placement. And here, you see that in order, again, to deliver this deleveraging program in the best conditions, we wanted to have a high level of liquidity, EUR 2.8 billion -- or EUR 2.7 billion is really massive. And you have a negative cost of carry on these lines, which -- on this cash which, of course, explains part of the increasing cost of debt, which, by the way, is also connected to the COVID-19. So this is purely connected to the COVID-19. And going forward, this should, of course, subside. But at this stage, we feel it's the best approach to maintain this level of liquidity.

Okay. And sorry, just quickly following up on that bit. The 3.9% that is not necessarily related to the excess liquidity in Europe, right, or is it?

No. The 3.9% is connected to the U.S., and this includes as well the cost in connection with foreclosures and in particular, the cost on the debt that is for closure.

Okay, fine. And just very lastly, just on the progress on the U.S. assets. Out of interest, you mentioned you had been approached and outdid a tender offer for some of those assets. Is there anything you can say in terms of pricing, where that was kind of coming out?

No, not yet. We are working on it, and we have ongoing discussions so far. So I think it would be -- it wouldn't be wise for our negotiation to share that.

Next question from Stuart McLean from Macquarie.

Just a couple of questions on the U.S. for me, just in regards to -- firstly, on vacancy, 2022, the year of recovery, where do you expect vacancy to fall to in the U.S. to help aid those discussions around disposals? Question 2 is very much linked to that, just in regards to underlying income there. It looks like it's minus 12.9% in the half and connected to vacancies, where do you see that going? And when do we start to get growth? And thirdly, in the U.S., the net initial yield came in by 0.1%. And how is that justified? And is there an expectation that the cap rates or yields expand on that U.S. portfolio in the next 12 months?

Okay. So to start with the vacancy. So I think that's a -- the vacancy of our assets has been deeply impacted by very specific bankruptcies. The first one being ArcLight, the cinema operator, so where we have 2 cinemas, these 2 cinemas closing during the first half of the year increased our vacancy by 0.4%. We have already ongoing negotiations and discussions to replace this cinema operator in these 2 assets. So we should see the vacancy in that respect going down. We see 2 assets that are also impacted by the -- mainly, I would say, the direct environment linked also to this homeworking policy that has been followed for now more than 18 months in the U.S. that are World Trade Center and San Francisco Center, where we see the vacancy level really increasing a lot linked to closure of stores. If we were to exclude these 2 assets, the level of vacancy in our portfolio would be closer to the 12.4%. And we expect that with the effort that we are putting now on this short-term leasing strategy and as well the ongoing negotiations that we have that we should see a stabilization and a potential decrease of the vacancy level in the course of the second half of the year. So this is to answer your question on the vacancy. On the disposal, I'm not sure to get exactly what was your question. So what was exactly the detail that you wanted?

So I didn't ask on disposal. My next question was in regard to kind of MGR in the U.S. When would you expect to achieve positive growth there? And my third question was in regards to the net initial yields in the U.S. reducing by 0.1%.

Yes. On the MGR levels, you see that when we go for long-term leases, we have been able to achieve uplift on the MGR level at 2.9% on the long-term leases, which demonstrates, I think, the appeal of our centers and so their strength seen from the retailers. The strategy that we have put in place in terms of leasing is really to maintain the occupancy and recreate, as mentioned, the commercial tension. So we need to get out of this pandemic, crisis of pandemic period, maintain the commercial appeal of our assets, their attractiveness by having the right offer. In the meantime, working on having the new experiences, like we did with Pinstripes that will open 2 restaurants with us, large restaurants with the bowling concept associated to it. And that's where we think that in the course of '22, '23, we'd be able to pay this commercial tension recapture part of the MGR that we lost in the last 2 years for these short-term leases. On the net initial yield, I will leave the question to Fabrice.

Yes. In fact, when you look at the net initial or more precisely the net potential yield, it's effectively from 4.9% to 4.8%. This being said, the 4.9% was, in particular, inflated or increased because of the 4 assets that exited the portfolio this semester. And therefore, if you exclude those ones, we had a net potential yield of 4.8%. So meaning that the assets were more or less stable -- or the net potential yield was stable in the U.S. with again a marked difference between regional assets, for which the value on a like-for-like basis went down by 10.6% and minus 1.6% for our U.S. flagship assets, which corresponds to a trend that is more or less similar with our flagship assets in Europe.

If I could just ask 2 follow-ups there. Firstly, in regards to the shorter-term deals, do you think that the retailers are going to be accustomed to this going forward? And therefore, the cash flow certainty of the assets is, therefore, reducing with shorter leases? And secondly, should that be reflected in terms of asset valuation? And do you think a 4.8% yield or cap rate is realistic in the market?

No. We are not expecting the retailers to get used to it, at least on the short-term basis. Why is that? Because obviously, when you sign a short-term lease, you don't reinvest into the store. And then if you want to reinvest into the store, which the retailers need to do if they want to remain attractive and performing, they need to go for these long-term leases. What we are trying to solve here is a very specific situation linked to these unstabilized operating conditions in which we are. These restrictions that are limiting the capacity of some of our retailers to get their business back on track at 100% and that we -- because we talk about mainly renewals, so that our people that want to stay, but doing negotiations now, which when it is the worst moment ever is not the wise thing to do for them as well as for us. They wonder what will be the recovery. They want to see where we are going and where the sales are going. And then I think that in 2 years from now, which is somehow the average duration of these short-term leases, we'd be in a better position to negotiate. We'll have a better view on what is the sales level for the retailers, what does it bring to their network, and what is the contribution of these stores on their network and their bottom line. And for us, we would have been able to strengthen these assets and then to be more demanding on the MGR level. What we did in this negotiation as well, again, and this is important to get it, is that we lowered the MGR, but we didn't negotiate only the lowering of the MGR, we lowered the threshold to trigger the turnover rent, such as we expect that once the sales will be back with the traffic at the 100% level, and even potentially above for same categories, that the leasing revenues that will generate these leases would be somehow close to where they were pre-COVID.

And just on the follow-up in regard to the net initial yield, do you think that that's realistic pricing in the market in the U.S.?

I think the -- these valuations are based on appraisals. They are reviewed by the auditors. And at the end of the day, what will make the value is the price at which we'll be able to sell those assets.

Book values. Sorry, those yields, when you'd expect to transact that in the market?

I think that, again, in the U.S., the market is not reopened for main assets, and we'll see where the market is once we'd be ready to go on to the market. I think that -- again, today, the focus is on the operations. As I said, we have continued to strengthen these assets like we do on Westfield Montgomery or Westfield Garden State Plaza with these tenders that we organized for the densification project. On Garden State Plaza, we have more than 14 developers that reply to the first round of this tender to be the partner and to be the developer of this densification project, which will strengthen our assets not only through the -- for the traffic that we generate these resi buildings around us or on top of us, but also by the land value that we have been able to externalize that was not part of, by the way, of the GMV of our appraisers as they were not taking it into account. So we have been externalizing additional value, and we'll strengthen our assets. We see what are the values when we go on the market. So far, third-party appraisers are giving us their opinion on the value of these assets. These valuations are as well audited by our financial auditors that have no comments to this valuation. So that's what we take into account at that stage.

Next question from Benjamin Richford from Societe Generale.

Just a couple of additional questions, please. It looks like quite a shallow capital value decline in the half. And I just wondered whether you foresee that as being essentially coming out of the trough? And do you anticipate capital value growth to level off from here, first question?

I mean it's hard to anticipate values, obviously. I think one of the supporting or the comforting element that we saw in H1 2021 was: A, the access to funding for these assets, and the 2 transactions that we have completed on retail sales were supported by bank finances, mortgage bank financing, which was available at attractive conditions. Just to give you an idea on the 7-year loan that we have put in place on Shopping City Süd, the cost was 1.39%, which is obviously very attractive. So the debt market is there for prime quality asset, and we are using that in the context of the disposals. And the second point is that effectively, when we sell these assets, we tend to sell them at book value. So they give us a strong reference in terms of valuation. And we will see, as we proceed with further disposals, how this evolves. That's already the case, by the way, on offices where you saw that -- the premium achieved was significant, 13.5%, and we'll see how this develops on the retail side. But as I said, we have already identified the assets that we intend to sell and we'll test the appetite on those assets.

Okay. A question on the U.S. The 4 assets you foreclosed on, presumably then they had a negative net book value at the end of December in order for you to realize a gain in the first half. Are there other sort of assets in the U.S. that you've sort of also a negative book value?

Sorry?

Is there a negative values again on other assets, I don't think so at this stage.

I think the point on these assets was that effectively at the end of the day, the value of the asset was lower than the value of the debt that we had in front of this. And therefore, we could get rid of -- we could have the -- both the asset and the debt exiting our balance sheet, which created these capital gains. And this is, I would say, specific to these assets. And this is something that effectively usually applies to, on regional assets, the weakest ones. But these were the 4 ones for which we have this type of situation.

Okay. And one final question. Just wondering about the delayed government support in France? And how much you might expect to realize from that if it goes through and gets approved?

Are you talking about the support that they -- or the last...

The delayed government support for tenants in France that's...

Yes. It's linked to our -- also the delay is linked to -- I think that the French government has several times said that they would bring support to the retailers to be able to -- for them to pay their rent and the service charges for the period where they were closed. The delay is linked to negotiation in between the European community and the French government, where it seems to be the case that these negotiations are almost now done, and that the French government is working on the application decrees. So we are waiting for this decree in the coming weeks. I don't know, this has been something that we -- the retailers and us have been discussing with the French government now for a while as they announced very quickly in February that they will give support to the retailers. So that's something that should happen soon, but I cannot tell you when. But I know that they are working on it.

And how much would you expect to get if there was -- if that gets passed?

That depends on what they will -- what the government will finalize finally put onto the decrees, so which I don't know yet. So I know what's the philosophy, which is to bring support to be able to better rent and the service charges because I need to see what is the final outcome of the negotiation with Brussels as well as the way they will drive the decree, which is something that we are still waiting for.

Next question from Florent Laroche-Joubert from ODDO.

I may have maybe 3 questions. So first question about on H2. So would it be possible maybe to have any more color on collection rates in July. So can we say that now the situation can be considered as normal due to the fact that all shopping centers are now open. That would be my first question. Maybe my second question. So you have disposed a significant European centers in H1. So do you think that we could expect any other major disposal in H2 or maybe should we expect them to occur in 2022? And maybe my third question would be on a disposal plans for U.S. flagships. So I understand that you had some initial markets of interest. So have you any updated discussions with some investors in the U.S.?

Maybe we'll start with the U.S. flagship because what I said is that we have discussion on the regional assets. So we -- that is part of our effort to streamline our portfolio. We have not entered into discussions -- any discussion today on the flagship assets. And we are, again, as I said, working on the different options and what are the best options for us to deleverage the company. So that's what we are doing so far. So no particular discussions with investors on the flagship assets streamlining of the regional portfolio. On the European centers, so we are working on preparing all the potential disposals. We have several options that we are looking at. I can't tell you that this would be achieved in the course of the second half. We may move on some of these disposals during the second half, but it could be that it would be executed in '22. What we said we will achieve is EUR 4 billion of disposals in Europe before the end or at year-end 2022.

And coming back to your first question on rent collection for July, it stands at 72%, including 75% in the U.S., 65% in the U.K. and 71% in Continental Europe, where effectively, France continues to lag behind and in particular, as Jean-Marie mentioned, in the context of these expectations and the wait-and-see approach of a number of retailers waiting for the decree and the support that they could get from the French government. So that's where we stand. So we are not yet in a fully normalized situation. Nevertheless, one of the positive features that we saw is that once shopping centers, again, were able to trade again, we saw an improvement of the rent collection. And if I take the U.K. example, it was 70% in Q1 and increased to 74% in Q2 at a time when they were able to operate. And even the Q1 collection rate increased over time from 56% in -- at the end of March to a level of 69% 2 months later and 70% as of now. So there is an improvement going forward, but it takes longer to get to the usual levels of rent collection.

Next question from Bart Gysens from Morgan Stanley.

I had a question regarding your short-term lease strategy. When did you decide to do this? Were those 56% of leases signed spread over the first half? Or is that recently accelerated? And can you give us a bit of guidance of the leases you've signed in July so far, of what percentage of those have actually been shorter as well? Should we now expect 70%, 80%, 90% of all leases that are shorter? Or is kind of 50%, 60% the new norm?

So last year -- we started this last year. Again, and it's mainly when you look at the breakdown of the activity, so you see that this is really mainly in the year -- you see that this is mainly in the U.S. Globally, last year, we were at 44% of the leasing activity being on short-term leases. So we started last year during the H2 looking at what was the situation, the discussions with the retailers. So this is when we decided to maybe accelerate on this, such as we can as well focus more on the long-term leases and having you know our teams being split it in between what can be renewed very fast and get out of this very difficult situation in which we are regarding the operations and the crisis and just moving the discussion after the end of the crisis, and so we are at 56%. So obviously, as operations are stabilizing, we are expecting that the short-term leases would be a smaller proportion of what we achieved. It as well would be linked to the level of vacancy and what are the deals that we'll be able to achieve, such as we see a start of the reduction of the vacancy. And as you will see the reduction of the vacancy, you will see the proportion of long-term leases coming higher and back to where they were before.

Can I just confirm, when you said it's mainly in the U.S., but it's still 45% in Europe, in Continental Europe as well, right?

Yes, yes, yes. But when you look at the brand, this is where you see that the proportion is really higher and that you see an evolution as well in Europe, but this is -- the big proportion today is in the U.S.

And my last -- or my follow-up question on this. I think you or Fabrice, forgive me if it wasn't you, but made the comment that for a lot of retailers, this is a very difficult time to renew. They don't have much visibility on the future trajectory and, therefore, they renew without actually that much negotiation. Is that what's happening? Are retailers not using the very difficult environment to cut cost and push their landlords higher? Or are they just expressing the difficult environment they're in by maybe holding back rent for a bit, and they're actually willing to sign new leases? Some color on kind of how the negotiation with retailers is going, that would be interesting.

Again, if you look at the -- so globally, we are at 44% of our leasing activity that is on long-term leases with 7.5 years average duration uplift at 1.3% globally on our portfolio. So -- you have a lot of retailers that are still signing long-term leases. Here in the current environment in which we are, when you start -- and this is also us pushing for that. It's also for the matter -- or for the sake of speed,is that when you have a renewal and when you have a retailer that is coming and telling you that he lost 50% of his sales, you can always argue that this is due to COVID. Still, they say -- they tell you this is this. So what we offer them is, "Okay, you know what, let's talk about this situation. Let's go through the recovery, let's lower the MGR, let's lower at the same time the thresholds that would -- which we define when you would trigger the sales base rent. Let's see where the recovery is. And let's have the discussion of your renewal in 2 years." This goes a little bit like the -- some of the negotiations that we have on some retailers where we do developments. And where you don't know where the sales will be, so you start at a lower MGR, you go for a higher turnover rent or a higher variable part of your rent that you would crystallize after year 3 or year 4 in into your MGR. This is exactly the same discussion. Our vision is that our retailers, in our assets, in our flagship assets, will see the traffic coming back to 2019 levels. And I think it would be in Q4, and they would see the sales level being at 2019 levels, if not above 2019 levels, starting from Q4 and going forward. Obviously, taking into account that the vaccination rates will be high enough such as we see the stabilization of the operating conditions, that we see the easing of the restrictions that we are still suffering from on certain categories of activities and that we have the people coming back to the offices. So that's our plan. So we think that, as I said during the presentation, that part of the turnover rent or the variable part of the rent would be higher in the coming 2 years in proportion linked to the fact that our sales level would be higher and that will trigger more turnover rent. But leasing revenue-wise, we should see less gap than what's the MGR downlift that you see on the short-term lease, minus 13.8% globally, let's imagine it would be.

And last question from Jaap Kuin from Kempen.

Yes, a few more from my side. I think a lot of questions already on U.S. valuations and disposals. So I was wondering if you could elaborate a bit on the structure of the U.S. debt, specifically on the cross guarantees between U.S. debt and European assets? Also what you would quantify if you would sell, for example, next year, somewhere as hedge breaking cost because of your very high hedging positions overall? If you could start there, please.

Yes. So in the U.S., we have a combination of corporate debt, which is mainly bond debt, and you have the details. And so we have issued a bond, which effectively -- for which is effectively a cross-guarantee between Europe and the U.S. so that we have one single credit for all the bonds that have issued -- that have been issued by the group as a whole. And so you have this part, which is really a corporate debt. And in addition to that, on a number of assets, usually, by the way, the smallest ones, the regional ones, and we don't -- we just have one asset of -- the flagship asset, which is subject to mortgage financing. So for those ones, it's more nonrecourse financing and effectively in those types of situations and, of course, depending on the cases, we could consider these situations of foreclosures -- voluntary foreclosures as we have done it in H1 2021. For the rest, the majority of the debt is corporate debt. And so when it comes to the unwinding of these ones: First, in terms of hedging, for you to know, both the mark-to-market of the debt and of the derivatives is included in our NAV computation. So basically, the NAV computation gives you the full impact of the unwinding of these bonds. And secondly, of course, there would be ways to try to structure that and potentially to keep part of this corporate debt at URW level by doing cross-currency swaps, switching from USD to euro, in particular, for the longer-dated bonds, which, of course, are the most expensive, but as well which are the ones that allowed to increase the overall maturity. So on these ones, of course, it will all depend on the deal structure that we will implement in the U.S., but there are ways to mitigate obviously this impact. And in any case, the full impact of the mark-to-market of the debt and the financial instruments in the U.S. is in our books and in the NAV computation.

All right. And in terms of the co-owners in the JV assets in the U.S., can you maybe elaborate on their positions?

Well, it's -- when you look at, for example, Westfield Montgomery or Westfield Garden State Plaza, we are working together on the tender. It's Nuveen on one and [ MAG ] on the other one. And for them, they just wait to know what are the options that we want to exercise and see what would be the impact. So -- but it's part of this tax force that I was talking about to work on the different options and to see also what is the thing that we can do with our JV partners as well.

But would you say that, in general, your interest are aligned in kind of disposing the assets after all including...

On some assets, yes, we have some of our JV partners, in particular, on the regional ones that are interested in selling these assets as well. So that's the work that we are doing these days and that we started now almost 6 months ago to engage this discussion with the different partners, look at where we somehow invest and continue to invest and to develop these assets. When I say to develop, it's to lease these assets like we do on Topanga, with the Sears box extension that we are developing -- currently developing with our partner, CPP, and where we have been able to sign in the course of the first half of the year, a flagship store with Hermès. And that we signed as well with AMC that will move the cinema there. So that's what we are doing today and having ongoing discussions and permanent discussion with our JV partners, asset by asset.

Right. Two more, if I may. First, could you disclose the yield on cost on the -- after delivering mall of the Netherlands?

I will leave the question to Fabrice. I'm not sure that we disclose that on an asset by asset basis.

No. We have not disclosed that on an asset by asset basis. So -- but just for you to know, and that's an important element. As I've mentioned, as part of the non-like-for-like revaluation, there was obviously a revaluation of this asset. And so the mark-to-market of the asset upon delivery generated a gain in URW's books in terms of -- with a positive impact in terms of revaluation. And so this is as well a testimony of again, the pre-letting or level of letting at 94% of the center and as well the strong start that we have seen.

All right. Okay. That's interesting. So positive move on the yield then. All right. And then my last question because I guess you mentioned the mark-to-market of debt in the NAV, but I can see in the presentation, you focus on NRV, which is, in my view, an inflated number, why? Because also with the disposal of Shopping City Süd you've actually proven that some of deferred tax is actually liability. So why don't you focus on the NTA?

Our intention is, obviously, to continue the operations and, therefore, to be a going concern. And so that's why these metrics is, in our view, the most representative of the way we want to manage the business. And this being said, of course, you have all the details, and you have this in very details, including as well the NTA NAV. So you have all the details of the different components of each NAV computation in the document. So we disclose all of them and the way they are computed, including, again, on an item-by-item basis the retreatment that are made to reach the -- each NAV computation.

Just from my personal perspective, including an expected write-down on the U.S. assets, I think it would be more prudent to use the NTA approach, but that's probably my personal opinion.

Thank you. That was the last question. So back to you for the conclusion.

All right. Thank you for your questions. And again, happy to see you to welcome you on mall of the Netherlands as soon as we can travel back to the Netherlands, which is the case for some of our European countries. So don't hesitate, you should do the tour. Thank you.

Thank you.