Photographer: Christophe Morin/Bloomberg
Paris Office Boom Helps Unibail-Rodamco Beat Profit ExpectationsBy
Europe’s resurgent economy is fueling a boom in demand for Paris offices.
Unibail-Rodamco SE, which was the continent’s biggest listed landlord even before its A$21 billion ($17 billion) deal to buy Australia’s Westfield Corp., beat profit expectations thanks to a record year for office leasing, it said in a statement Wednesday. The commercial-property owner posted a 7.2 percent increase in earnings per share for 2017 to 12.05 euros ($15), narrowly beating its own guidance set in February last year.
The election of President Emmanuel Macron, who has promised a string of reforms to boost the French economy, has helped stoke confidence and increase growth across Europe. Companies leased 2.6 million square meters of Paris office space in 2017, the most for 10 years, while Unibail alone rented 72,000 square meters, according to the statement.
“2017 was an outstanding year for Unibail-Rodamco,” Chief Executive Officer Christophe Cuvillier said in the statement. The performance was “driven by solid leasing activity in retail and a record leasing year in offices,” he said.
Paris-based Unibail benefited from rising consumer spending, which lifted income from stores where rents are linked to sales. The company grew net rental income by 13.5 percent in its office business, while revenue from its larger shopping-mall unit increased by 4.3 percent.
Unibail secured an agreement to buy Westfield in December as it sought to own the best properties and gain scale to help it compete with internet retailers. The company also wants to boost demand for its stores by tempting retailers in Westfield’s malls to expand into Europe and for its own tenants to open in North America.