Is Unibail-Rodamco-Westfield a compelling investing proposition?

Europe’s largest commercial real estate group’s “investor days” took place in London on June 13-14, 2019 and it provided investors with much information as the URW share is currently serving an enticing 8% dividend yield and presents a 38% discount to Net Asset Value (NAV).

Discussing several key issues including the Westfield (WFD) acquisition and URW’s subsequent ability to sustain its European growth, URW acknowledged that the deterioration of retail environment in the U.S. and UK is more severe than anticipated.

Although online sales penetration has continued to increase up to 12.1% of total sales in 2018, online profitability remains very low especially outside the U.S. with rising costs and lower margins, making URW underline the physical stores’ continuous value and remind that even Amazon (AMZN) goes from online to offline with a view to offering enhanced customer experience.

From investors’ standpoint, the outlook 2019-2023 for URW aims principally to improve cost base, realize revenue synergy and reduce leverage and asserts that going forward a minimum dividend of €10.80 per share is sustainable after benefiting from a 5-year annual growth rate 2014-2018 at 4.99%.