UNIBAIL-RODAMCO-WESTFIELD
UNIBAIL-RODAMCO-WESTFIELD N.V.
2023 ANNUAL REPORT
2
Table of Content
MANAGEMENT BOARD REPORT 3
1.1 GENERAL INFORMATION 4
1.2 BUSINESS REVIEW AND 2023 RESULTS 4
1.3 FINANCIAL REVIEW 2023 RESULTS 8
1.4 DIVIDEND 12
1.5 NON-FINANCIAL INFORMATION 12
1.6 RELATED PARTY TRANSACTIONS 15
1.7 POST-CLOSING EVENTS 15
1.8 OUTLOOK 15
1.9 STATEMENT OF THE PERSONS RESPONSIBLE FOR THE ANNUAL REPORT 15
CORPORATE GOVERNANCE AND REMUNERATION 16
2.1 CORPORATE GOVERNANCE 17
2.2 REPORT OF THE SUPERVISORY BOARD 20
2.3 REMUNERATION REPORT 34
2.4 REMUNERATION PAID TO THE SB MEMBERS FOR 2023 FINANCIAL YEAR 40
FINANCIAL STATEMENTS AS AT DECEMBER 31, 2023 41
3.1 CONSOLIDATED FINANCIAL STATEMENTS 42
3.2 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 46
3.3 COMPANY ONLY FINANCIAL STATEMENTS AS AT DECEMBER 31, 2023 91
3.4 NOTES TO THE COMPANY ONLY FINANCIAL STATEMENTS 92
3.5 OTHER INFORMATION 100
RISK FACTORS 108
4.1 ENTERPRISE RISK MANAGEMENT (“ERM”) FRAMEWORK 109
4.2 MAIN RISK FACTORS 113
4.3 TRANSFERRING RISK TO INSURERS 125
INFORMATION ON THE COMPANY, SHAREHOLDING AND THE SHARE CAPITAL 127
5.1 INFORMATION ON THE COMPANY 128
5.2 SHARE CAPITAL AND OTHER SECURITIES GRANTING ACCESS TO THE SHARE CAPITAL 128
5.3 SHARE BUY-BACK PROGRAMME AND SHARE ISSUANCES 129
5.4 INFORMATION ON THE SHAREHOLDING 130
5.5 ARTICLES OF ASSOCIATION OF THE COMPANY AND CHARTERS OF THE CORPORATE BODIES 132
5.6 BRANCHES 136
5.7 INVESTMENT BY THE COMPANY OUTSIDE THE GROUP 137
ADDITIONAL INFORMATION 138
6.1 STATEMENT OF THE PERSONS RESPONSIBLE FOR THE ANNUAL REPORT 139
6.2 AUDITORS 139
6.3 INDEPENDENT APPRAISERS 139
6.4 DOCUMENTS AVAILABLE TO THE PUBLIC 140
6.5 GLOSSARY 140
3
MANAGEMENT BOARD
REPORT
4
The Management Board (“MB”) of Unibail-Rodamco-Westfield N.V. (“URW NV” or “the Company”) hereby presents its management report and
the consolidated and company only financial statements of URW NV for the period ending December 31, 2023.
1.1 GENERAL INFORMATION
URW NV is a public limited liability company under the laws of the Netherlands. The Company was incorporated as Unibail-Rodamco B.V., a
private company with limited liability on February 14, 2018 and converted its legal form to a public limited liability company on March 22, 2018.
On the same date, the Company changed its name to WFD Unibail-Rodamco N.V. At the Annual General Meeting held on June 9, 2020, the
shareholders adopted the name change to Unibail-Rodamco-Westfield N.V.
On June 7, 2018, Unibail-Rodamco SE (now known as Unibail-Rodamco-Westfield SE, or “URW SE”) announced it had completed the acquisition
of Westfield Corporation (“Westfield”), to create Unibail-Rodamco-Westfield (“URW Group”), the stapled group which, collectively, consists of
URW SE, URW NV and their respective controlled undertakings whose financial information is included in their respective consolidated financial
reporting, the premier global developer and operator of flagship destinations. The URW Group combines two of the strongest and most respected
names in the real estate industry to build on their legacies. The acquisition of Westfield was a natural extension of URW SE’s strategy of
concentration, differentiation, and innovation. Upon completion of the Westfield Transaction, URW SE and former Westfield securityholders held
stapled shares, each comprising one ordinary share in the capital of URW SE and one class A share in the capital of URW NV (“Stapled Shares” -
see 5.2.2 “authorised share capital – form of shares”). The URW Group has obtained the approval of the Euronext Listing Board on February 28,
2023 to change its market of reference from Euronext Amsterdam to Euronext Paris and delist the URW stapled shares from Euronext Amsterdam.
Therefore as at December 31, 2023 the Stapled Shares are listed on Euronext Paris. URW Group has also established a secondary listing on the
Australian Securities Exchange to allow former Westfield securityholders to trade Stapled Shares locally in the form of CHESS Depositary Interests
(“CDIs”).
The main business objectives of the Company and its subsidiaries (together referred to as “the Group” or “URW NV”) are to invest in assets,
primarily through the direct or indirect acquisition of real estate and to enter into cash pooling arrangements with, to provide financing to, and
to furnish guarantees for the benefit of the URW Group and other affiliated bodies of the Company.
1.2 BUSINESS REVIEW AND 2023 RESULTS
This section provides an overview of the most significant business events for URW NV in 2023. The Company’s accounts reflect the financial
results for the period from January 1, 2023, until December 31, 2023. All references to operational results, such as tenant sales, rents and leases
signed, relate to the 12-month period ended December 31, 2023, unless indicated otherwise.
Certain amounts in the business review are recorded in USD to eliminate currency impact in comparisons with the previous year. These amounts
in case of leasing activity and Commercial Partnerships also reflect data for the full centre and do not consider the URW NV ownership percentage
in case of Joint Ventures.
1.2.1 ACCOUNTING PRINCIPLES
The Group’s consolidated financial statements as at December 31, 2023, were prepared in accordance with International Financial Reporting
Standards (“IFRS”) as applicable in the European Union as at such date.
The Group also prepares financial information for internal management purposes in a proportionate format, in which the joint-controlled entities
are accounted for on a proportionate basis, instead of being accounted for using the equity method under IFRS. The business review and results
are presented based on the financial information on a proportionate basis unless otherwise indicated, with no impact on the net results. The
proportionate part of the underlying amount is based on the percentage of ownership in the respective companies jointly controlled, associates
are accounted for at the equity value.
Certain amounts recorded in the consolidated financial statements reflect estimates and assumptions made by management in the current
uncertain context regarding inflation, interest rates and energy cost resulting from geopolitical and economic environment and difficulties in
assessing their impacts and future prospects. In this context, management has taken into account these uncertainties on the basis of reliable
information available at the date of the preparation of the consolidated financial statements, particularly with regards to the fair value of
investment properties and financial instruments, the estimation of the provision for doubtful debtors, as well as the testing of goodwill and
intangible assets.
Due to inherent uncertainties associated with estimates, the Group reviews those estimates based on regularly updated information. Actual
results might eventually differ from estimates made at the date of the preparation of the consolidated financial statements.
98% of URW NV’s property portfolio related to the Shopping Centres and Offices and intangible assets were valued by independent appraisers as
at December 31, 2023.
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1.2.2 SCOPE OF CONSOLIDATION
1
The organisation chart as at December 31, 2023, is as follows:
The principal changes in the scope of consolidation since December 31, 2022, are:
• The disposal of Westfield North County in February 2023;
• The disposal of Westfield Brandon in May 2023;
• The disposal of Westfield Mission Valley in July 2023;
• The disposal of Westfield Valencia Town Center in September 2023;
• The foreclosure of San Francisco Centre and Emporium (offices included) in October 2023.
1.2.3 OPERATIONAL REPORTING
URW NV operates in 2 regions, the US and the Netherlands and in 2 segments, retail and offices. Since activities in the Netherlands are minor
compared to the US, they are reported under “other region”.
1.2.4 OPERATING PERFORMANCE
Over the period, the economic situation continued to be impacted by high inflation and further increase in interest rates by Central Banks but a
resilient employment market. In this context, URW NV’s assets showed strong activity which goes beyond the post-COVID recovery. Sales and
footfall data in the US relate to Flagship assets as these are the core of URW NV’s activities in the US and as Regional assets are being streamlined.
The Group uses 2019 in some cases as a comparable year to 2023, URW NV is of the opinion that this is the last full year of business without many
disruptions.
FOOTFALL
2
AND TENANT SALES
3
In the US, 2023 footfall
4
increased compared to 2022, up +3.1%, exceeding 2019 levels.
US TENANT SALES
In the US, 2023 tenant sales
5
increased by +3.0%, or +4.8% excluding Luxury. Overall, 2023 sales came to +19.2% above 2019 levels
6
.
This performance compares with an average core inflation of 4.8% in 2023 and national sales index of +4.0%
7
.
The performances in 2023 were driven by the experiential sectors with +26.7%
7
for Entertainment, +13.5% for F&B, +13.4% for Fitness and +8.9%
for Health & Beauty, while Fashion was stable (+0.2%), but +16.8% above 2019. Luxury saw a -6.5% decline but remained significantly (+62.3%)
above 2019 levels.
1
The total scope of consolidation consist of more than 300 entities.
2
In the US excluding the centres for which no comparable data of the previous year is available. In addition, footfall has been restated from the disposals which occurred
during the semester.
3
Tenant sales for all US centres in operation, including extensions of existing assets, but excluding deliveries of new brownfield projects, newly acquired assets and
assets under heavy refurbishment, and excludes Auto and Department Stores in US. In addition, sales have been restated from the disposals which occurred during the
semester.
4
US Flagships only. US Regionals at -0.9%.
5
US Flagships only. US Regionals and US CBD asset (Westfield World Trade Center) at +3.0%.
6
US Flagships only. US Regionals and US CBD asset at +4.1%.
7
On a same scope. +90.2% including new openings.
6
The table below summarises the Group’s tenant sales growth during 2023:
US
Footfall (%)
Tenant Sales (%)
2023
vs. 2022
2023
vs. 2022
National
Sale
Index
US Flagships (excl. CBD)
3.1%
3.0%
4.0%
BANKRUPTCIES
The Group’s tenant insolvency procedures have affected 72 out of 2,768 stores in FY-2023 (vs. 37 out of 3,506 stores in FY-2022). The total
leasing revenues (including service charges of URW NV) which remain exposed to tenants currently in some form of bankruptcy procedure amount
to €8.3 Mn over c. 18,118 sqm of retail space.
RENT COLLECTION
8
As at February 16, 2024, 98% of invoiced 2023 rents and service charges
9
in the US were collected.
Overall rent collection by quarter in 2023 is shown below
10
:
Rent collection (%)
Q1-2023
Q2-2023
Q3-2023
Q4-2023
FY–2023
US Total
98%
98%
98%
97%
98%
As at December 31, 2023, the expected loss allowance in the Consolidated statement of financial position amounted to €47.1 Mn compared to
€57.1 Mn at the end of December 31, 2022. The expected credit loss for debtors recorded in the Consolidated statement of comprehensive
income amounted to a reversal of €4.0 Mn for the period ending December 31, 2023, compared to an expected credit loss of €11.5 Mn for the
year ended December 31, 2022.
1.2.5 LEASING ACTIVITY
In 2023, 758 leases were signed on standing assets, representing 2,582,895 sq. ft. and $175.7 Mn of MGR up compared to $137.3 Mn of MGR signed
in 2022
11
(up +28%) on 671 leases (up +13%), representing 2,319,670 sq. ft. (up +11%), illustrating the strong dynamic of the activity. As market
conditions improved, the number of long-term deals signed also increased from 343 to 489 (up +43%), representing 65% of 2023 deals, compared
to 51% in 2022. MGR signed on leases above 3 years increased by +47% and amounted to 72% vs. 63% in 2022.
The overall uplift on relettings and renewals was +16.8% for the US Shopping Centres (+8.1%) and +20.6% for Flagships
12
. In 2023, the Group
focused on long-term lettings and relettings, while relying on short-term deals in a more selective and limited way mainly on renewals. Deals
longer than 36 months had an MGR uplift of +32.7%, including +36.2% for the US Flagships, while for leases between 12 and 36 months, MGR
uplifts were slightly negative (-3.4% compared to -19.8% in 2022). The strong uplift signed on long-term deals compensated for the downlift on
short-term deals signed during the Covid-19 pandemic. This allowed the Group to increase the revenues secured through MGR and reduce the
portion of SBR attached to the short-term leases previously in place.
In total, the Shopping Centres SBR increased from $20.5 Mn in 2019 (3.1% of NRI) to $81.4 Mn in 2022 (13.8% of NRI) and amounted to $54.0 Mn
in 2023 (10.3% of NRI). The decrease of -$27.4 Mn in 2023 compared to last year and -$16.6 Mn on a like-for-like basis, is mainly due to high SBR
settlement in 2022 based on 2021 sales and conversion of SBR to MGR.
The tenant mix continued to evolve with the introduction of new retailers (Gorjana at Westfield Old Orchard, Westfield UTC and Westfield Valley
Fair, Swatch at Westfield UTC, Faherty at Westfield UTC, The North Face and Jo Malone London at Westfield Galleria at Roseville) and DNVBs
(Vuori at Westfield Century City, Rothy’s at Westfield Galleria at Roseville and Alo at Westfield Topanga).
The Luxury sector has also seen strong progress with a number of important openings such as Celine and Dior at Westfield Topanga, Chanel
Beauty at Westfield Century City, Chloé, Valentino and Fendi at Westfield Valley Fair as well as Saint Laurent Paris at Westfield UTC and Westfield
Valley Fair.
1.2.6 RETAIL MEDIA & OTHER INCOME
Retail Media & other income revenue in 2023 amounted to $62.4 Mn, a decrease of -$1.2 Mn (-1.9%) compared to 2022, impacted by disposals.
On a like-for-like basis, it increased by +$6.2 Mn, i.e. +12.2%.
Retail Media continued to perform strongly. In 2023, several product launches were organised by prime brands in the automotive and luxury
sectors, including BMW and Jaeger LeCoultre at Westfield Century City.
URW also launched creative campaigns with Disney, Emirates, Dior, Cartier, Chanel, Lucid and L’Oréal.
8
MGR + CAM in the US, excluding 2023 settlement.
9
MGR + CAM in the US.
10
Based on cash collection as at February 16, 2024 and assets at 100%.
11
Restated for disposed assets.
12
Excluding CBD centres.
7
1.2.7 NET RENTAL INCOME AND VACANCY
The total net change in NRI for URW NV amounted to -$63.4 Mn and breaks down as follows:
• -$63.4 Mn related to shopping centres impacted by disposals partly offset by an increase in Flagships NRI;
• -$0.9 Mn related to offices and residential.
US shopping centre NRI has been impacted by 2022 and 2023 disposals and foreclosure for -$74.7 Mn (Westfield Santa Anita, The Village at
Topanga, Westfield Trumbull, Westfield South Shore, Westfield North County, Westfield Brandon, Westfield Mission Valley, Westfield Valencia
Town Center and San Francisco Centre and Emporium (offices included)).
Overall, US like-for-like shopping centre NRI increased by +$8.7 Mn i.e. +1.9% mainly driven by Flagship assets. Like-for-like NRI growth for
Flagship assets was +$22.2 Mn i.e. +6.2% driven by net leasing revenue
13
of +5.9%, increase in variable income and recovered property taxes
14
,
partly offset by lower SBR and negative impact of doubtful debtors (release in 2022 of moratorium provision booked in 2021). Like-for-like NRI
performance for Regionals was -12.3% and -5.2% for CBD assets.
As at December 31, 2023, the EPRA vacancy was 8.4% ($86.9 Mn), down by -190 bps from December 31, 2022. The decrease in vacancy was driven
by the proactive leasing approach of the Group and change in scope
15
. The vacancy decreased by -90 bps to 7.3% in the Flagships, below its pre-
Covid level of 2019 (7.7%). It decreased by -160 bps to 10.1% in the Regionals, along with the vacancy of the CBD assets that decreased by -290
bps to 20.1%.
Occupancy on a GLA
16
basis was 93.5% as at December 31, 2023.
The OCR on a rolling 12-month basis stood at 10.7% as at December 31, 2023, compared to 10.5%
17
as at December 31, 2022 and 11.8% as at
December 31, 2019, reflecting a combination of rental uplifts and strong sales performance. OCR for Flagships stood at 11.4% as at December
31, 2023, below 2019 level of 11.7%.
13
Net MGR and CAM.
14
Based on Capex spent.
15
Disposals/foreclosures in the US.
16
GLA occupancy taking into account all areas, consistent with financial vacancy.
17
Based on all stores operating for more than 12 months (excluding atypical activities) and not only Specialty stores.
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1.3 FINANCIAL REVIEW 2023 RESULTS
The Group’s consolidated financial statements (based on IFRS basis) reflect the activities of URW America Inc, URW WEA LLC (“WEA”) and WFD
Unibail-Rodamco Real Estate B.V. The table below shows the result of the Group in recurring and non-recurring activities. This definition is
utilised by URW NV’s management to distinguish between operational (recurring) and other (non-recurring, including fair value valuations of
Investment Properties and loans) activities and does not intend to reflect IFRS nor EPRA definitions:
(€Mn)
2023
2022
Recurring
activities
Non-recurring
activities*
Result
Recurring
activities
Non-recurring
activities*
Result
United States
Gross rental income
340.8
-
340.8
379.3
-
379.3
Operating expenses & net service charges
(122.6)
-
(122.6)
(140.4)
-
(140.4)
Net rental income
218.2
-
218.2
238.9
-
238.9
Share of result of companies accounted for
using the equity method
215.4
(487.6)
(272.2)
257.1
(469.0)
(211.9)
Gains/losses on sale of properties
-
28.0
28.0
-
0.1
0.1
Valuation movements on assets
-
(165.5)
(165.5)
-
(395.6)
(395.6)
Result Shopping Centres United States
433.6
(625.1)
(191.6)
496.0
(864.5)
(368.5)
Other
Gross rental income
2.0
-
2.0
2.2
-
2.2
Operating expenses & net service charges
(0.4)
-
(0.4)
(0.3)
-
(0.3)
Net rental income
1.6
-
1.6
1.9
-
1.9
Gains/losses on sales of properties
-
0.1
0.1
-
(3.1)
(3.1)
Valuation movements on assets
-
0.8
0.8
-
(0.3)
(0.3)
Result Shopping Centres Other
1.6
0.9
2.6
1.9
(3.4)
(1.5)
TOTAL RESULT SHOPPING CENTRES
435.2
(624.2)
(189.0)
497.9
(867.9)
(370.0)
United States
Gross rental income
3.7
-
3.7
5.3
-
5.3
Operating expenses & net service charges
(2.3)
-
(2.3)
(2.9)
-
(2.9)
Net rental income
1.4
-
1.4
2.4
-
2.4
Share of result of companies accounted for
using the equity method
1.4
(4.9)
(3.5)
1.1
(12.7)
(11.6)
Valuation movements on assets
-
(19.8)
(19.8)
-
(2.2)
(2.2)
Result Offices United States
2.8
(24.6)
(21.8)
3.5
(14.8)
(11.3)
TOTAL RESULT OFFICES
2.8
(24.6)
(21.8)
3.5
(14.8)
(11.3)
Other property services net income
0.2
-
0.2
0.5
-
0.5
Corporate expenses
(18.3)
-
(18.3)
(20.7)
-
(20.7)
Acquisition and related costs
-
(5.1)
(5.1)
-
(5.9)
(5.9)
NET OPERATING RESULT
419.8
(653.9)
(234.1)
481.2
(888.6)
(407.4)
Financing result
(448.3)
(45.2)
(493.4)
(361.9)
523.8
162.0
RESULT BEFORE TAX
(28.4)
(699.1)
(727.5)
119.3
(364.8)
(245.4)
Tax income (expense)
(2.9)
38.0
35.1
(1.2)
12.9
11.7
NET RESULT FOR THE PERIOD
(31.3)
(661.0)
(692.4)
118.2
(351.8)
(233.7)
External non-controlling interests
(16.4)
(66.4)
(82.8)
3.7
(85.1)
(81.5)
NET RESULT FOR THE PERIOD ATTRIBUTABLE TO THE OWNERS OF
URW N.V. SHARES
(14.9)
(594.6)
(609.6)
114.5
(266.8)
(152.2)
* Non-recurring activities include valuation movements, disposals, mark-to-market and termination costs of financial instruments, bond tender premiums, impairment of goodwill or recognition of
negative goodwill as well as costs directly incurred during a business combination and other non-recurring items.
FINANCIAL RESULTS
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URW NV reported negative net operating results of -€234.1 Mn (2022: -€407.4 Mn) for the period ended December 31, 2023. The recurring net
operating result decreased to €419.8 Mn (2022: €481.2 Mn) mainly due to the disposal of properties in the US in 2023 (Westfield North County,
Westfield Brandon; Westfield Mission Valley Shopping Centres, Westfield Valencia Town Center and San Francisco Centre and Emporium (offices
included)). The negative net operating result of the non-recurring activities for the period ending December 31, 2023, decreased from -€888.6
Mn to -€653.9 Mn, mainly due to the decrease of -€213.7 Mn in the negative valuation movement on assets compared to December 31, 2022.
The net result for the year ended December 31, 2023 is -€692.4 Mn (2022: -€233.7 Mn) of which -€609.6 Mn (2022: -€152.2 Mn) attributable to
the shareholders of URW NV with a net result per share (owners of URW NV shares) for the period of -€2.63 (2022: -€0.66).
Non-recurring financing result decreased by -€569.0 Mn to -€45.2 Mn (2022: €523.8 Mn). The decrease is predominantly caused by the unwinding
of Macro Swaps, this resulted in a decrease of -€450.6 Mn to €14.7 Mn (2022: €465.3 Mn) in the fair value of derivatives. Non-recurring financing
result is further affected by a decrease in fair value adjustment of preference shares from €64.2 Mn in 2022 to €9.8 Mn for the period ended
December 31, 2023, as well as an impairment on Rouse of -€61.7 Mn (2022: -€7.5 Mn) for the year ended December 31, 2023.
The recurring net result for the period decreased with -€149.5 Mn from €118.2 Mn as at December 31, 2022, to -€31.3 Mn for the period ended
December 31, 2023. The decrease in the net recurring result for the period ended December 31, 2022 can mainly be attributed to the increase
in the interest rate in 2023, this resulted in an further decrease of -€86.4 Mn in financing result from -€361.9 Mn in 2022 to -€448.3 Mn for the
year ended December 31, 2023. The contribution of companies accounted for using the equity method decrease with -€41.4 Mn to €216.8 Mn
(2022: €258.2 Mn) for the year ended December 31, 2023, this is mainly due to the disposals that took place in 2023.
18
The figures are presented on IFRS basis.
9
LIQUIDITY POSITION
URW NV has cross guarantees with URW SE and the liquidity needs are covered by the available undrawn credit lines at URW Group level. As at
December 31, 2023, the URW Group had €13.6 Bn of cash on hand and undrawn credit lines (€13.7 Bn on a proportionate basis) including €5.5 Bn
of cash on hand (€5.6 Bn on a proportionate basis).
1.3.1 INVESTMENT AND DIVESTMENT
Unless otherwise indicated, the data presented in investment and divestment are on a proportionate basis as at December 31, 2023, and
comparisons are with values as at December 31, 2022.
INVESTMENTS
In 2023, URW NV invested €166.2 Mn in capital expenditures in investment properties, compared to €110.3 Mn in 2022. The total investment
breaks down as follows:
(€Mn)
2023
2022
Shopping Centres
166.2
106.5
Offices
-
3.8
TOTAL CAPITAL EXPENDITURE
166.2
110.3
DISPOSALS
Disposal of Westfield North County
On February 1, 2023, the Group completed the sale of the Westfield North County ground lease located in Escondido, California, to Bridge Group
Investments and Steerpoint Capital, transferring ownership and management of the asset. The sale price of $57 Mn (at 100%, URW share 55%) for
the asset, which has 30 years left on its ground lease, reflects the property’s book value as at December 31, 2022.
Disposal of Westfield Brandon
On May 25, 2023, URW disposed Westfield Brandon Shopping Centre in the US. The sale price of $220 Mn (URW share 100%) reflects a 10.0% net
initial yield and a 4.4% discount to the latest unaffected appraisal.
Disposal of Westfield Mission Valley
On July 21, 2023, the Group completed the sale of Westfield Mission Valley Shopping Centres in San Diego, California, for a total amount of $290
Mn (at 100%, URW share 42%), including the sale of Westfield Mission Valley “East” to Lowe Enterprises and Real Capital Solutions, and Westfield
Mission Valley “West” to Sunbelt Investment Holdings Inc. The transaction value reflects a combined initial yield of 8.5% on the in-place net
operating income (“NOI”) and a 12% discount to the last unaffected appraisal.
Disposal of Westfield Valencia
On September 4, 2023, the Group completed the sale of Westfield Valencia Town Center, in Santa Clarita, California, to Centennial Real Estate
at a total value of $199 Mn (at 100%, URW share 50%), above the $195 Mn debt amount (at 100%, URW share 50%) on the asset. The transaction
value reflects less than 3% discount to its last unaffected appraisal.
Foreclosure of San Francisco Centre and Emporium
On October 26, 2023, San Francisco Centre and Emporium (office included) was put on foreclosure. The Group lost control of the asset (asset
value of $301 Mn as at June 30, 2023) and the companies holding it were thus deconsolidated together with the debt allocated to it ($340 Mn).
Investment property classified as held for sale
In H2-2023, URW signed a Sale, Purchase and Escrow Agreement with a $30 Mn non-refundable cash deposit for the disposal of Westfield Oakridge.
The transaction is expected to be completed in Q2-2024.
1.3.2 PROJECTS
URW NV did not have any share in URW Group’s projects pipeline for the year ended December 31, 2023.
1.3.3 PROPERTY PORTFOLIO AND NET ASSET VALUE AS AT DECEMBER 31, 2023
Unless otherwise indicated, the data presented in the property portfolio are on a proportionate
19
basis and as at December 31, 2023, and
comparisons are with values as at December 31, 2022.
PROPERTY PORTFOLIO
Investment market retail
US retail investment volumes saw a -38% year-on-year decrease in 2023, with total transactions reported by Real Capital Analytics of $57.3 Bn.
For shopping centres, the decrease in deal volume year-on-year was -51% at $30.5 Bn.
Shopping Centre portfolio
The value of URW NV’s Shopping Centre portfolio is the addition of the value of each individual asset as determined by the Group’s appraisers
and the value of the Westfield trademark. In the information all respective assets are included, including investment property under construction.
98% of the value of URW NV’s portfolio was appraised by independent appraisers as at December 31, 2023.
19
The sum of the Gross Market Value (“GMV”) for the assets fully consolidated, the ownership at share of the GMV of assets jointly controlled accounted for using the
equity method and the equity values for assets not controlled by URW NV.
10
The following table shows the breakdown for the US Shopping Centre portfolio:
Proportionate
December 31, 2023
December 31, 2022
US Shopping Centre portfolio
by category
Valuation incl.
transfer taxes
Valuation
excl.
estimated
transfer taxes
(a)
Net Initial
Yield
(b)
Potential
Yield
(c)
Valuation
incl. transfer
taxes
Valuation
excl.
estimated
transfer taxes
Net Initial
Yield
(b)
Potential
Yield
(c)
in € Mn
in € Mn
in € Mn
in € Mn
US Flagships
(d)
9,026
8,845
4.6%
5.2%
9,944
9,851
4.2%
4.7%
US Regionals
512
512
9.4%
11.2%
1,004
1,004
8.6%
9.5%
US SC TOTAL
9,538
9,357
4.9%
5.5%
10,947
10,854
4.6%
5.2%
Figures may not add up due to rounding.
(a) The sum of the Gross Marked Value (“GMV”) for the assets fully consolidated, the ownership at share of the GMV of assets jointly controlled accounted for using the equity method and the equity
values for assets not controlled by URW. Valuation excluding estimated transfer taxes represents the GMV minus transfer taxes and transaction costs which are estimated after taking into account the
likely disposal scenario: sale of the asset or of the company that owns it.
(b) Annualised contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses, divided by the asset value net of estimated transfer taxes and transaction
costs. Shopping centres under development or not controlled by URW and the Westfield trademark are not included in the calculation of NIY.
(c) Annualised contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses + the ERV of vacant space, divided by the asset value net of estimated transfer
taxes and transaction costs. Shopping centres under development or not controlled by URW, and the Westfield trademark are not included in the calculation of Potential Yield.
(d) T
he Westfield trademark is included in the valuation of the US Flagships.
ADDITIONAL VALUATION PARAMETERS - IFRS 13
URW NV complies with the IFRS 13 fair value measurement and the position paper
20
on IFRS 13 established by EPRA, the representative body of
the publicly listed real estate industry in Europe. Considering the limited public data available, the complexity of real estate asset valuations,
as well as the fact that appraisers use in their valuations the non-public rent rolls of the Group’s assets, URW NV believes it is appropriate to
classify its assets under Level 3. In addition, unobservable inputs, including appraisers’ assumptions on growth rates and Exit Capitalisation Rate
(“ECR”), are used by appraisers to determine the fair value of URW NV’s assets. In addition to the disclosures provided above, the following
tables provide a number of quantitative data in order to assess the fair valuation of the Group’s assets.
SHOPPING CENTRES
The below overviews including most significant input and output parameters of the external valuations of the investment properties and the
sensitivity overviews of the fair value of investment property are presented based on a proportional basis for the fully consolidated investment
property as well as the investment property included in the joint ventures accounted using the equity method. The total value of investment
property represents €9,015.6 Mn, this consist of the total €4,217.4 Mn presented investment property in the consolidated position excluding
investment property under contraction carried at cost and €4,798.2 Mn of the proportioned share of the investment property presented in the
joint venture and equity value for the associate overview in note 7.2.
The shopping centres are valued using the discounted cash-flow and/or yield methodologies using Compound Annual Growth rates (“CAGR”) as
determined by the appraisers.
Shopping Centres – December 31, 2023
Net Initial
Yield
Rent in €
per sqm
(a)
Discount
Rate
(b)
Exit
Capitalisation
Rate
(c)
CAGR of
NRI
(d)
US
Max
12.2%
1,438
14.0%
12.0%
9.5%
Min
3.2%
345
6.8%
5.0%
1.9%
Weighted average
4.9%
767
7.4%
5.5%
4.8%
NIY, DR and ECR weighted by GMV. Vacant assets, assets considered at bid value and assets under restructuring are not included in Min and Max calculation. Assets under development or not
controlled by URW NV and the Westfield trademark are not included in this table.
(a) Average annual rent (MGR + SBR) per asset per sqm.
(b) Rate used to calculate the net present value of future cash-flows.
(c) Rate used to capitalise the exit rent to determine the exit value of an asset.
(d) Compound Annual Growth Rate (CAGR) of NRI determined by the appraiser (10 years).
For the US, the split between Flagships and Regionals is as follows:
Shopping Centres – December 31, 2023
Net Initial
Yield
Rent in €
per sqm
(a)
Discount
Rate
(b)
Exit
Capitalisation
Rate
(c)
CAGR of
NRI
(d)
US Flagships incl. CBD
Max
6.1%
1,438
7.8%
6.0%
9.5%
Min
3.2%
476
6.8%
5.0%
2.5%
Weighted average
4.6%
842
7.2%
5.3%
5.0%
US Regionals
Max
12.2%
593
14.0%
12.0%
4.5%
Min
7.8%
345
10.0%
8.3%
1.9%
Weighted average
9.4%
421
10.9%
9.2%
2.9%
NIY, DR and ECR weighted by GMV. Vacant assets, assets considered at bid value and assets under restructuring are not included in Min and Max calculation. Assets under development or not
controlled by URW NV and the Westfield trademark and are not included in this table.
(a) Average annual rent (MGR + SBR) per asset per sqm.
(b) Rate used to calculate the net present value of future cash-flows.
(c) Rate used to capitalise the exit rent to determine the exit value of an asset.
(d) Compound Annual Growth Rate (CAGR) of NRI determined by the appraiser (10 years).
20
EPRA Position Paper on IFRS 13 - Fair value measurement and illustrative disclosures, February 2013.
11
The ECR
21
used by appraisers in December 2023 valuations increased compared to the ones in December 2022 valuations:
• In the US from 5.1% to 5.5% (from 4.8% to 5.3% for the US Flagships and from 8.0% to 9.2% for the US Regionals).
The Discount Rate
21
used by appraisers in December 2023 valuations increased compared to the ones in December 2022 valuations:
• In the US from 7.0% to 7.4% (from 6.8% to 7.2% for the US Flagships and from 9.5% to 10.9% for the US Regionals).
The CAGR of NRI in below table is based on 2023 NRI. Compared to 2022, the CAGR of NRI are as follows:
CAGR of NRI determined
by the appraiser in the
DCF
CAGR of NRI – Starting from Dec 31, 2022
Shopping Centres
Valuations as at
Dec 31, 2023
Valuations as at
Dec 31, 2023
Valuations as at
Dec 31, 2022
US Flagships incl. CBD
5.0%
4.7%
5.0%
US Regionals
2.9%
1.7%
2.3%
OFFICES PORTFOLIO & OTHERS
Offices & Others portfolio includes offices and the residential projects. The value for the total US Office & Others portfolio saw a significant
change from 2022 at €69.3 Mn on December 31, 2023 (December 31, 2022: €163 Mn), the change is mainly attributed to the foreclosure of San
Francisco Centre and Emporium (offices included) in 2023.
For occupied offices and based on an asset value excluding estimated transfer taxes and transaction costs, the Offices & Others division’s Net
Initial Yield (“NIY”) increased by +600 bps to 11.5%.
Proportionate
December 31, 2023
December 31, 2022
Valuation of US occupied office space
Valuation incl.
transfer
taxes
(a)
Valuation excl
.
estimated
transfer taxes
(a)
Net Initial
Yield
(b)
Valuation incl.
transfer
taxes
(a)
Valuation excl.
estimated
transfer taxes
(a)
Net Initial
Yield
(b)
in € Mn
in € Mn
in € Mn
in € Mn
US Office
28
27
11.5%
44
42
5.5%
(a) Valuation of occupied office space based on the appraiser’s allocation of value between occupied and vacant spaces.
(b) Annualised contracted rent (including latest indexation) and other incomes for the next 12-months, net of operating expenses, divided by the value of occupied space net of estimated transfer taxes
and transaction costs. Assets under development are not included in this calculation.
The value of URW NV’s Offices & Others portfolio, after accounting for the impact of works and capitalised financial and leasing expenses,
decreased by -€27.0 Mn (-35.8%) on a like-for-like basis, due to a yield impact of -25.0% and a rent impact of -10.7%.
1.3.4 FINANCIAL RESOURCES
URW NV has cross guarantees with URW SE and the liquidity needs are covered by the available undrawn credit lines at URW Group level.
2023 was marked by a significant rates increase and high volatility in credit markets, driven by uncertainties around geopolitical tensions,
concerns over economic prospects and monetary policy.
However, year-end saw a decrease in rates, as Central Banks hinted the end of these rates hike cycles on the back of decreasing inflation. Thanks
to this improved market sentiment, credit markets rallied with bond issuance volumes surging at year-end.
URW Group took advantage of the favourable market conditions in early December to issue a €750 Mn 7-year green bond, that garnered a strong
investor demand, achieving an oversubscription of 6.1 times at peak.
Overall, in 2023, URW Group raised €3,250 Mn (€3,559 Mn on a proportionate basis) of medium to long-term funds in the bond and bank markets
(including credit facilities renewals), further strengthening its liquidity position.
In addition, in June 2023, URW Group successfully completed an Exchange Offer on its €1.25 Bn Perp-NC23 hybrid notes into a combination of
new hybrid notes and cash, achieving a participation rate of 92%.
As at December 31, 2023, URW Group had €13.6 Bn of cash on hand and undrawn credit lines (€13.7 Bn on a proportionate basis including €5.5
Bn of cash on hand (€5.6 Bn on a proportionate basis).
This liquidity position increased by c. €0.6 Bn compared to 2022 end of year’s position that stood at €13.0 Bn (€13.2 Bn on a proportionate basis)
including €3.3 Bn (€3.5 Bn on a proportionate basis) of cash on hand. It takes into account €1.1 Bn of financing repayment including partial hybrid
repayment in 2023.
21
Restated from 2023 disposals.
12
As at December 31, 2023:
• The Interest Coverage Ratio (“ICR”) was 4.2x (4.2x);
• The Funds From Operations (FFO) to Net Financial Debt Ratio (“FFO/NFD”) was 7.8% (7.6%);
• The Loan-to-Value (“LTV”) ratio
22
was 41.8%
23
(41.2%);
• The Net debt/EBITDA ratio
24
was 9.3x (9.6x).
The average cost of debt for the period was 1.8% (2.0%), representing the blended average cost of 1.2% for Euro denominated debt and 4.2% for
USD and GBP denominated debt as a result of improved cash remuneration on an increasing cash position and a stable cost of gross debt thanks
to hedges in place.
DEBT STRUCTURE AS AT DECEMBER 31, 2023
URW NV’s financial debt as at December 31, 2023, amounted to €8,300.9 Mn (2022: €8,569.2 Mn). The total IFRS cash on-hand of URW NV came
to €38.1 Mn as at December 31, 2023 (2022: €76.0 Mn). The solvability ratio as at December 31, 2023 is 5.5% (2022: 7.2%).
The financial debt breakdown and outstanding duration to maturity as at December 31, 2023, is disclosed on IFRS basis:
Outstanding duration to maturity (€Mn)
Current
Non-current
Total
December 31, 2022
Less than 1 year
1 year to 5 years
More than 5 years
Total
December 31, 2023
Bonds and notes
927.2
1,131.9
1,587.4
3,646.5
3,774.2
Bank borrowings
(6.3)
1,086.0
-
1,079.7
105.0
Other financial liabilities
70.4
3,441.7
56.5
3,568.6
4,646.4
Lease liabilities
1.2
4.9
-
6.1
43.6
TOTAL
992.5
5,664.5
1,643.9
8,300.9
8,569.2
€500 Mn of the loan with an original nominal value of €1,250 Mn, of which already €750 Mn has been converted earlier, has been converted into
a capital security with a 99-year maturity as per December 31, 2023. The remaining part of the loan is €55.4 Mn.
The converted part qualifies as equity with the exception of the amount due on this instrument, which is initially measured at fair value at
balance sheet date (€0.2 Mn at December 31, 2023) and subsequently at amortised cost using the effective interest method. The amendment
fee paid to URW SE of €12.5 Mn has been recorded in 2023 under financial expenses.
1.4 DIVIDEND
Given the statutory results and cumulated negative retained earnings of URW NV in 2023 as well as in 2022, URW NV had no obligation to pay a
dividend neither in 2024 for the fiscal year 2023, nor in 2023 for the fiscal year 2022, under the FII regime and other REIT regimes it benefits
from.
URW Group however, will propose to the URW SE annual general meeting (“AGM”
25
) a cash distribution of €2.50/share to be paid on May 16,
2024. This cash distribution will be made out of premium and will qualify as an equity repayment
26
for French tax purposes (article 112, 1 of the
French tax code).
This proposal is based on 2023 URW Group achievements, the improved visibility of the URW Group’s operating performance, the delivery of its
main committed projects in 2024, the limited forecasted Capex beyond 2024, its credit metrics and its liquidity position.
S&P and Moody’s confirmed the proposed cash distribution would have no impact on the current rating of the URW Group.
1.5 NON-FINANCIAL INFORMATION
1.5.1 BUSINESS MODEL
URW NV is part of the URW Group, the world’s premier developer and operator of Flagship destinations. URW NV owns a portfolio of prime
commercial properties, located in the largest and most prosperous cities across the United States.
URW NV’s strategy is to vertically integrate the entire chain of value creation in real estate. The combination of its three activities of i)
refurbishment and renovation, ii) investment and iii) management, provides URW NV with unique market knowledge and expertise. This
knowledge and expertise assist URW NV in dealing with markets that are cyclical in nature and its strategy is designed to allow URW NV to
continue its investment programmes even during economic downturns.
Thanks to this portfolio of high-quality assets and talents including experts in the business of investment, refurbishment, leasing, management,
and divestment, URW NV has been able to face the pandemic and foresees a future generating strong growth.
22
Net financial debt (or “net debt”) as shown on the Group’s balance sheet, after the impact of derivative instruments on debt raised in foreign currencies/total assets,
including transfer taxes (43.4% excluding transfer taxes).
23
Excluding €726 Mn of goodwill not justified by fee business as per the Group’s European bank debt leverage covenants (€779 Mn on a proportionate basis).
24
On last 12-month basis.
25
To be held on April 30, 2024.
26
For the tax treatment please refer to relevant financial advisors.
13
URW NV’s strategy, as member of the URW Group, is led by its purpose to creating sustainable places that “Reinvent Being Together”. URW NV
is a committed partner in the regeneration of cities to accelerate urban environmental transformation by creating and operating unique
sustainable places that connect people through extraordinary experiences. For examples of sustainable long term growth value creation, the
strategy to realise this and the contribution made, reference is made to the URW Group's Sustainability Report.
With a company culture based on belonging, passion and innovation, our actions are guided by our six Together at URW values: boldness,
excellence, teamwork, ethics, passion and ownership. These values make us who we are, and are the foundation of how we succeed together
today, and how we will succeed together tomorrow. As member of the URW Group, URW NV’s achievements, efforts and desires, are gathered
on URW Group level in the URW Universal Registration Document and reference is made to it.
Finally, URW NV is, by nature, a long-term player committed to sustainable construction and social responsibility across all of its activities.
Whether it be architecture, city planning, design, energy efficiency, social responsibility, the URW Group is recognised as a leader in the industry.
1.5.2 ENVIRONMENTAL, SOCIAL, AND CORPORATE GOVERNANCE (“ESG”)
In October 2023, URW Group announced a comprehensive evolution of the Better Places roadmap setting ambitious SBTi-approved net-zero
targets in terms of carbon emissions reduction and reinforcing its environmental performance objectives, with the aim to develop and operate
places that provide sustainable experiences and contribute to thriving communities. For more information on this updated roadmap, please visit:
www.urw.com/2023-sustainability-investor-event
as well as the updated Better Places Scorecard.
2023 marks another exceptional year in terms of sustainability performance for the Group, as URW Group continued to deliver high performance
on its Better Places roadmap:
ENVIRONMENTAL TRANSITION
• The URW Group achieved a -43% GHG emissions’ reduction in Scopes 1, 2 & 3, in absolute terms compared to 2015
27
;
• This has been partly driven by a reduction of -30% in energy intensity across the portfolio since 2015 thanks to energy savings and
investments in energy efficiency across the retail portfolio. URW Group retail assets are provided with 100% electricity from
renewable resources;
• At year-end, the URW Group reached 23.8 MWp of installed on-site renewable energy capacity, of which 13.8 MWp in Europe, on
track to reach its objective of 50 MWp in Europe by 2030;
• The Westfield Topanga renovation received the LEED Platinum certification, the most ambitious level achievable.
SUSTAINABLE EXPERIENCE
• URW Group rolled out its innovative Sustainable Retail Index, built in cooperation with Good On You. More than 2,500 stores were
assessed and 800 brands rated during the roll-out in the Fashion sector
28
. 82% of the URW Group’s fashion sector eligible revenues
are already engaged in sustainability initiatives with 52% rated “Leader”, “Advanced” or “Active”;
• The Health & Beauty methodology has been developed with Good On You in 2023, including wide-scale stakeholder engagement on
more than 50 indicators. Health & Beauty retailers will be rated in 2024;
• Finally, the cooperation with WWF as a critical friend is ongoing on the Fashion methodology review;
• URW Group launched the first edition of its Westfield Good Festival in 22 Westfield assets in Europe (equivalent events were held
in all other European retail assets). The festival aimed at informing consumers with an emphasis on the circular economy for the
first year. This year, key partners such as Douglas, Adidas, IKEA, Primark, Decathlon, SodaStream, Too Good To Go, L’Occitane,
Kiko and Innocent took part in the initiative;
• In 2023, URW Group expanded the Westfield Grand Prix, a competition recognising and rewarding the sustainable retail champions
of tomorrow, to 5 countries: Austria, France, Germany, Spain and the UK. Among the 310 candidates, 9 winners were rewarded;
they feature innovative business models in circularity (e.g. Airpaq, a German manufacturer of accessories made from automotive
industry waste; Biicou, a French marketplace for refurbished children’s products), durability (e.g. PJ.Lobster, a Spanish
manufacturer of long-lasting repairable eyewear) and community (e.g. Known Source, a community-based second-hand fashion
retailer).
THRIVING COMMUNITIES
• URW Group donated c. €13 Mn in 2023
29
and supported approximately 600 charities and NGOs on topics such as employment and
skills, social inclusion and environment;
• Through the URW Group for Jobs initiative, the URW Group supported more than 2,600 people via job placements and targeted
trainings;
• 93% of URW Group’s employees participated in a sustainable learning, through the URW Group’s Climate School launched earlier
this year, specific sustainability-focused programmes and courses organised in different countries, and/or our annual leadership
event centred again on the URW Group’s sustainability transition;
• In 2023, the URW Group hosted its annual Community Days with all regions organising initiatives. More than 1,300 URW employees
volunteered over 9,000 hours of their time, participating in activities focused on promoting social inclusion and preserving
biodiversity around the URW Group’s shopping centres;
• In 2023, URW Group advanced its global inclusion learning offer with a Group-wide Allyship Programme, encompassing a webinar
and e-doing tool to help teams integrate habits into daily work. Inclusion was embedded throughout key learning activities,
including the URW Group Manager Programme, a Learning Week event and onboarding series;
27
As at year-end 2023.
28
Fashion sector: Fashion Apparel, Sport Apparel, Jewellery, Bags & Footwear & Accessories.
29
Including donations of the airports division and contributions made at national and corporate levels.
14
• The URW Group set a commitment that at least 40% of senior management positions
30
would be held by women before the end of
2024. This has already been achieved with 42.5% of such positions held by women in 2023;
• In addition, URW Group’s employee-led Be You at URW Networks delivered an International Women’s Day campaign to celebrate
the women positively impacting communities (48 centres and all HQs participated) and teams in Austria, Central Europe, Germany,
UK and US hosted Pride activities;
• 80% of URW Group’s global workforce participated in the 2023 employee pulse survey and 70% (vs. 65% in 2022) indicated positive
sentiment towards URW Group’s commitment to diversity and creating an environment of inclusion.
GREEN AND SUSTAINABILITY-LINKED FINANCING
• The URW Group issued its first green bond (of €750 Mn) in the Euro bond market since 2015, to finance or refinance Eligible Green
Assets in line with the URW Group’s 2022 ambitious Green Financing Framework
31
;
• Eligibility criteria within the framework include among others the BREEAM certification of at least Excellent level, the EU Taxonomy
substantial contribution criteria of the climate mitigation delegated act, or a maximum amount of carbon emissions emitted during
the year;
• 66%
32
of the URW Group’s funds raised (including credit facility renewals) over 2023 are under a sustainability-linked or green
format including 90% in Europe (see “Financial resources” note for more details).
URW Group is included in the main ESG indices and the URW Group’s sustainability achievements are reflected in the ratings and awards, including
to date:
• Corporate Knights: inclusion in the 2024 Global (worldwide) 100 Ranking;
• CDP: positioned in the A-list of organisations committed to tackling climate change for the 6th year in a row (2024 results on CDP
2023);
• ISS ESG Corporate: confirmed B rating (prime status; 1st decile rank);
• GRESB: “5 Star” rating, ranked among the top 20 rated entities worldwide;
• Sustainalytics: 3rd in the REIT subindustry worldwide with a “Negligible” risk rating;
• Refinitiv: positioned among the best of the RE sector with an A score;
• EPRA sBPR Award: for the 12th time in a row, URW Group received the EPRA Gold Award in 2023 for completing its 2022 reporting
in accordance with the EPRA Sustainability BPR;
• ESG indices: in addition to maintaining its position in the top 10 of the Euronext CAC 40 Governance Index, URW Group is a
component of the Euronext CAC 40 ESG Index, the Euronext Low Carbon 100 Europe® Paris-Aligned Benchmark Index, the MSCI
Global Green Building Index, MSCI Europe Low Carbon Leaders MSCI World Low Carbon Leaders and the ECPI Global ESG Gender
Equality Index.
For more information on Better Places and the detailed 2023 sustainability performance, please refer to the 2023 Universal Registration Document
to be released in March 2024 as well as the Sustainability section of URW Group’s website:
https://www.urw-nv.com/en/investors/financial-
information.
1.5.3 RISK MANAGEMENT AND CONTROL SYSTEM
URW NV conducts its business in 2 countries and drives its real-estate activity with a wide variety of actors and business partners. Due to business
activities and relationship with business partners, URW NV faces risks of failure in compliance with international and national anti-bribery,
corruption, money laundering & fraud law. For more information regarding the various compliance policies, the implemented processes, the
outcome of those policies and the principal risks related to the policies and how these are managed, reference is made to chapter 4.2.2.5
category # 5: legal and regulatory risks. In light of its values, mission and strategy, URW NV acknowledges the importance of good governance as
an important basis for sound operational management and meeting its corporate objectives, whilst ensuring an adequate system of governance
to protect all interests of its management, staff, shareholders and other relevant stakeholders.
In this respect, URW NV considers that good governance starts with good behaviour and attitude at the top and establishing awareness and
compliance regarding sound operations and ethical behaviour in URW NV’s business culture. To achieve this, URW NV has established its
Administrative Organisation and Internal Control (“AOIC”) based on the following objectives:
• to provide insight in the organisational set-up in a clear and unequivocal manner, including duties, obligations and division of roles
and responsibilities;
• to ensure ethical and sound management over the policies, control processes and operating risks of the organisation;
• to facilitate proper guidance on the organisation and its governance, policy house and processes to the staff of URW NV, its
shareholders or other external parties; and
• to comply with applicable statutory and regulatory obligations.
During the year no major failings in the internal risk management and control system have been observed.
The main features of the risk management and control system of the Company including the risk appetite can be found in chapter 4 “Risk
Management and Internal Control” of this Annual Report.
30
Senior management positions: all positions with a job level 15 and above, plus any country/regional management team at job level 14. 160 executives in total as at
December 31, 2023.
31
The green financing framework is available under: https://cdn.urw.com/-/media/Corporate~o~Sites/Unibail-Rodamco-Corporate/Files/Homepage/INVESTORS/
Financing-Activity/Sustainable-Financing/Framework/2022/20221116-URW-Green-Financial-Framework-Brochure.ashx
32
On an IFRS basis.
15
1.5.4 PERSONNEL-RELATED INFORMATION
URW NV’s recruitment and career development policies are designed to attract and retain the best talent on the market. The Group is committed
to offering employees a working environment that fosters diversity and equal opportunities to enable each individual to acquire the experience
needed to build an exciting career that creates value for the Company.
Employees receive regular support and advice on career development. They meet with their managers once a year for year-end appraisals and
have the opportunity to provide and receive ongoing feedback through a specific process, which gives them the opportunity to discuss their
performance, objectives, career advancement and training needs.
1.6 RELATED PARTY TRANSACTIONS
All transactions between the company and legal or natural persons who hold at least ten percent of the shares in the company, have been
disclosed in note “7.4. Transactions with related parties” of the Financial Statements and are compliant with best practice provision 2.7.5. of
the Dutch Corporate Governance Code.
1.7 POST-CLOSING EVENTS
There have been no material subsequent events that management are aware about at March 19, 2024, that require adjustment to, or disclosure
in, the financial statements.
1.8 OUTLOOK
URW Group has seen a continuous improvement in its operating performance, now back to or better than pre-Covid levels in all its sectors. The
increasing appeal for prime retail assets should support URW Group’s performance even in a macro-economic environment that remains uncertain.
In parallel, URW Group has continued to sell non-strategic assets and is committed to further deleveraging. URW NV is well-positioned to continue
to perform in what is expected to remain an uncertain macro environment in 2023, the main drivers of these are:
• Consistent operating performance in retail following a strong 2023;
• Increasing variable income revenues;
• Ongoing cost discipline;
• The impact of disposals as part of its ongoing deleveraging plan.
The Group assumes no major deterioration of the macro-economic and geopolitical environment.
1.9 STATEMENT OF THE PERSONS RESPONSIBLE FOR THE
ANNUAL REPORT
We confirm that the information contained in this Annual Report gives, to the best of our knowledge, an accurate and fair view of the Company
and the information contained within is free from any material misstatement.
We confirm that, to the best of our knowledge, the financial statements have been prepared in accordance with the applicable accounting and
financial reporting standards, and give an accurate and fair view of the financial situation of the Company and of the entities taken as a whole
included in the scope of consolidation and that the enclosed management report presents a fair view of the development and performance of
the business, the results and of the financial situation of the Company and of the entities taken as a whole included in the scope of consolidation
and describes the main risks and uncertainties to which they are exposed.
Schiphol, March 19, 2024
Dominic Lowe Gerard Sieben
Chairman of the Management Board Member of the Management Board
Chief Operating Officer United States Chief Financial Officer URW NV
16
CORPORATE GOVERNANCE
AND REMUNERATION
17
2.1 CORPORATE GOVERNANCE
2.1.1 THE MANAGEMENT BOARD
The Company adopted a dual board structure: a Management Board (“MB”) and a Supervisory Board (“SB”). Such governance structure meets the
highest standards of corporate governance ensuring an efficient balance between management and supervision allowing a responsive and reactive
MB in the performance of its executive duties, in accordance with the non-executive prerogatives of the SB, whose balanced and diverse
composition guarantees independent oversight.
The MB is entitled to represent Unibail-Rodamco-Westfield N.V. (“URW NV”). Pursuant to the articles of association the power to represent URW
NV also vests in the Chief Operating Officer US (“COO US”) and any other MB Member acting jointly.
2.1.1.1 COMPOSITION OF THE MANAGEMENT BOARD
As at December 31, 2023, the MB is composed of two members. The business address of the MB is the Company’s registered address, World Trade
Center Schiphol, Tower F, 7th Floor, Schiphol Boulevard 315, 1118 BJ Schiphol, the Netherlands.
MB Members
Nationality
Age
Main function
Starting date
Expiry date
of term of office
Mr Dominic Lowe
British
52
Chief Operating Officer US –
MB Member
November 19, 2020
AGM 2025
Mr Gerard Sieben
Dutch
53
Chief Financial Officer –
MB Member
March 8, 2018
AGM 2026*
*Second mandate as of 2022 AGM
MANAGEMENT BOARD MEMBER INFORMATION AND MANDATES HELD AS AT DECEMBER 31, 2023
BORN ON:
October 30, 1971
NATIONALITY:
British
NUMBER OF STAPLED
SHARES HELD:
1,335
MR DOMINIC LOWE
MB MEMBER
- CHIEF OPERATING OFFICER US
• Graduate of the University of West London (HND, Business and Economics)
•
Dominic Lowe has also completed the Harvard Business School’s Executive Program and UCLA’s
Anderson School of Management’s Strategic Leadership Program.
•
Prior to joining the Company, Dominic Lowe served in numerous senior executive roles for BAA plc
(a holding company for the world's largest organis
ation of airports), focusing on UK and US business
development as well as pioneering the commercial transformation of the company’s flagship asset,
Heathrow International Airport in London. Earlier in his career, he was Operations Service Director
for Worl
d Duty Free, where he became a Founding Director of the Group’s inflight business in
Europe and Africa.
•
Dominic Lowe joined Westfield in November 2007 and served for more than a decade as Global
Group Director of Airports. Afterwards he became Executive Vice President and Director of the
Division Design, Development & Construction US.
• As of June 29, 2021, he is Chief Operating Officer US and MB member.
OTHER CURRENT FUNCTIONS AND MANDATES
OUTSIDE OF THE GROUP
PREVIOUS MANDATES DURING THE LAST FIVE YEARS
• N/A
• Executive Vice President and Director of the Division
DD&C US;
• Director of WCL Holdings, Inc.;
Westfield
Beneficiary 1, Inc.; Westfield Beneficiary 2, Inc.
;
Westfield Subsidiary REIT 1, Inc.; Westfield
Subsidiary REIT 2, Inc.; Westland Realty
Beneficiary,
Inc.;
• Member of
Horton Plaza REIT 1 LLC; Horton Plaza
REIT 2 LLC; Horton Plaza REIT 3 LLC; Mission Valley
REIT 1 LLC; Mission Valley REIT 2 LLC; Mission Valley
REIT 3 LLC; North County REIT 1 LLC; North County
REIT 2 LLC; North County REIT 3 LLC; Oakridge REIT
1 LLC; Oakridge REIT 2 LLC; Oakridge REIT 3 LLC;
Promenade REIT 1 LLC; Promenade REIT 2 LLC;
Promenade REIT 3 LLC; Santa Anita REIT 1 LLC;
Santa Anita REIT 2 LLC; Santa Anita REIT 3 LLC;
West
Valley REIT 1 LLC; West Valley REIT 2 LLC; West
Valley REIT 3 LLC; Westfield, lnc;
White City
Investments (no. 1) LLC.
OTHER CURRENT INTRA-GROUP FUNCTIONS AND
MANDATES
Group Companies
•
Director of Annapolis REIT 1 LLC;
Annapolis TRS, Inc.; Broward Mall LLC;
Fashion Square Service TRS, Inc.; GSP
Service TRS, Inc.; Montgomery Service,
Inc.; Roseville Shoppingtown LLC; Santa
Anita Borrower LLC; Santa Anita GP LLC;
URW America, Inc.; Valenci
a Town Center
Venture GP LLC; VF/UTC Service, Inc.;
Westfield America G.P. II LLC; Westfield
Paramus 1, Inc.; Westland Properties LLC;
•
Member of Annapolis REIT 2 LLC;
Annapolis REIT 3 LLC; Culver City REIT 1
LLC; Culver City REIT 2 LLC; Culver City
REIT 3 LLC; Plaza Bonita REIT 1 LLC; Plaza
Bonita REIT 2 LLC; Plaza Bonita REIT 3 LLC;
Southcenter REIT 1 LLC; Southcenter REIT
2 LLC; Southce
nter REIT 3 LLC; Topanga
18
REIT 1 LLC; Topanga REIT 2 LLC; Topanga
REIT 3 LLC; URW WEA LLC; West-
OC 2 REIT
1 LLC; West-OC 2 REIT 2 LLC; West-
OC 2
REIT 3 LLC; Westfield U.S. Holdings LLC.
BORN ON:
May 5, 1970
NATIONALITY:
Dutch
NUMBER OF STAPLED
SHARES HELD:
897
MR GERARD SIEBEN
MB MEMBER
- CHIEF FINANCIAL OFFICER
•
Bachelor in economics of the HEAO. Mr. Sieben has held various interim positions within the URW
Group since 2008, lastly as Finance Director Benelux.
•
He started his financial career in 1999 as a financial controller and held several finance positions
in different companies, including at Procter & Gamble Professional Care NL for 4 years.
•
Appointed to the MB effective March 8, 2018, and as Chief Financial Officer effective June 7, 2018,
following the Westfield Transaction.
OTHER CURRENT FUNCTIONS AND MANDATES
OUTSIDE OF THE GROUP
PREVIOUS MANDATES DURING THE LAST FIVE YEARS
• Non-executive Board Member of Le
Champion
(Netherlands)
• Owner of Sieben Consultancy.
OTHER CURRENT INTRA-GROUP FUNCTIONS AND
MANDATES
• Director of WFD Unibail-Rodamco Real
Estate B.V.
STAPLED SHARES HELD BY THE MEMBERS OF THE MANAGEMENT BOARD
As at December 31, 2023, the members of the MB held the following number of Stapled Shares:
Name
Total numbers of Stapled Shares held
Mr Dominic Lowe
Chief Operating Officer US
1,335
Mr Gerard Sieben
Chief Financial Officer
897
2.1.1.2 MANAGEMENT BOARD FUNCTIONING
ROLE OF THE MANAGEMENT BOARD
The Management Board (“MB”) is responsible for the day-to-day management of the Company which includes, among other things, formulating
strategies and policies, and setting and achieving the Company’s objectives. The Supervisory Board (“SB”) supervises and advises the MB. Each
member of the MB and SB must act in the corporate interest of the Company and of the business with it and consider with due care the interest
of all stakeholders including the Company’s shareholders, creditors, employees and customers.
The MB defends the interests of the Group and takes into account the relevant interests of all of the Company’s stakeholders. It is held to account
for the manner in which it carries out its duties. It must act with independence, loyalty and professionalism. As provided for by the Dutch
Corporate Governance Code, the SB assesses the functioning of the MB on an annual basis.
The Chief Operating Officer US has overall competence except for those duties expressly assigned to the Chief Financial Officer.
The Chief Financial Officer is responsible for generating profits via the optimisation of the cost of capital. He is also responsible for tax matters.
As such, the Chief Financial Officer will have primary responsibility for the overall finance functions of the Company (financial control,
consolidation, (re)financing, tax, the Company’s consolidated annual budget and 5-year business plan, and coordination of Company asset
valuations).
Certain main statutory provisions of the Company’s articles of association (the “Articles”) and MB rules governing the organisation, decision-
making and other internal matters of the MB (the "MB Rules") are summarised in section 5.5.3 of this Annual Report.
MB ACTIVITIES
The MB met 10 times during the year ending December 31, 2023. Overall attendance by the MB Members was 100%.
The MB deliberated on the following subjects:
Principal responsibilities of the MB
Key areas addressed, managed and/or implemented in 2023
Group Strategy
•
Refurbishment, investment, divestment and operations in
2023;
•
Change of market of reference to Euronext Paris by delisting
from Euronext Amsterdam
• Monitoring of the Deleveraging plan;
• Digital and Data strategy, tools and projects;
• CSR Strategy “Better Places 2030” and Long-
Term Energy
Action Plan.
19
Financial Policy and Financial Performance and Reporting
•
Review and closing of the 2022 consolidated full-
year results
and statutory financial statements and reporting on the half-
year accounts for the 2023 financial year;
•
Review and assessment of statutory auditor rotation, including
hand-over towards new statutory auditor;
• Group 5-year business plan and budget;
•
Financial resources, balance sheet management and
borrowing requirements (EMTN, bonds, liquidity agreements);
•
The Group’s dividend policy (as part of the dividend policy of
the URW Group) and annual allocation of results, notably
regarding the COVID pandemic;
•
Closing of the forecast management documents and
preparation of the quarterly activity reports for the SB.
Internal risk management and control systems
• Internal audits, internal control system and compliance
matters;
• Risk management and update of the risk mapping.
Governance and compliance with relevant laws and regulations
• Updates to the URW Group’s compliance programme
(including the Group's Anti-corruption Programme, Anti-
Money
Laundering and Sanctions Lists) and
completing the Group
Compliance and Group Anti-Corruption Programme trainings;
• Monitoring and implementing
of the proposed updates to the
Dutch Corporate Governance Code
•
Compliance with regulatory/legal requirements and changes,
including related party transactions (e.g. the Shareholder
Rights Directive II, the follow up of the Dutch Diversity Act).
Human Resources
• Talent development and management;
• Diversity and inclusion;
•
Mandatory employee training on sustainability, diversity and
inclusion;
• Recruitment and retention of key positions.
Shareholder Outreach and Engagement
• Investor dialogue;
• AGM materials (agenda, resolutions, etc.);
• General meeting;
• Group communication;
•
Updates to the Shareholder Engagement Guidelines and
review of the Stakeholder Dialogue Policy;
• Annual Report 2022, and half-year accounts for the 2023
financial year.
MB EVALUATION PROCESS
An assessment of the MB is carried out annually. Over the year ending December 31, 2023, the MB conducted an annual assessment of the
performance and overall functioning of the MB and its members. Following the self-assessment, the MB is generally satisfied with the overall
functioning of the MB and its respective members, notably including the quality of the interaction with the SB and its committees and company
officers and quality of effectiveness and governance. The MB also took note of the focus on continuous sound communication and strategic
leadership meetings. Overall, over the year ending December 31, 2023, it was concluded the MB functioned well.
2.1.2 THE SUPERVISORY BOARD
The SB is in charge of the supervision of the policy of the MB and the general course of affairs of URW NV and of the business connected with it.
The SB shall provide the MB with advice. In performing their duties, the members of the SB (each an “SB Member”) shall be guided by the
interests of URW NV and of the business connected with it. The SB report is summarised in section 2.2. of this Annual Report.
2.1.3 ADHERENCE TO THE DUTCH CORPORATE GOVERNANCE CODE
The Dutch Corporate Governance Code (“Code”) contains principles and best practice provisions that regulate relations between the MB, SB and
the (general meeting of) shareholders. As of the listing of the Stapled Shares on Euronext Amsterdam and Euronext Paris, the Code became
applicable to URW NV. The text of the Code can be accessed at https://www.mccg.nl
. The Code is based on a ‘comply-or-explain’ principle.
URW NV acknowledges the importance of good corporate governance and agrees with the general approach and with the provisions of the Code.
Considering inter alia the Stapled Share structure, current practices at Unibail-Rodamco-Westfield SE (URW SE), and the interests of the URW
Group and its stakeholders, URW NV deviates from the following best practice provisions of the Code:
• Best Practice Provision 1.3.2: Given the specific position of URW NV within the URW Group, its Internal Audit function is part of
the URW Group Internal Audit department. URW NV will align with the URW Group which does not yet have a periodical independent
external party review.
• Best Practice Provision 2.1.7: URW NV does not comply with best practice provision 2.1.7 (iii), which provides that for each
shareholder holding more than 10% of the shares in URW NV, there is at most one SB Member who can be considered to be affiliated
with such shareholder. URW SE holds more than 10% of the shares in URW NV. As a URW Group company, and in direct relation with
the Stapled Share structure and to ensure consistency between the two companies, two SB Members are also members of the
management board of URW SE and are as such affiliated with URW SE.
20
• Best Practice Provision 2.1.8: The Company applies this best practice provision. Accordingly, the chair of the Supervisory Board is
considered non-independent pursuant to best practice provision 2.1.8.i. that provides that a supervisory board member is not
independent if they have been an employee or member of the management board of the company in the five years prior to
appointment.
• Best Practice Provision 2.1.9: Considering inter alia the Stapled Share structure, current practices at URW SE and URW NV, and the
interest of the URW Group and its stakeholders, the chair of the Supervisory Board is considered non-independent. A supervisory
board member is not independent if they have been an employee or member of the management board of the company in the five
years prior to appointment.
• Best Practice Provision 2.2.6: An annual self-evaluation on the functioning of the SB and it’s committees takes place. Although not
yet under the supervision of an external expert, the company is studying options and timing thereof and the company has no
current intention to deviate from best practice provision 2.2.6.
• Best Practice Provision 2.3.2: Given the interrelatedness of nomination, assessment of MB performance and remuneration, URW
NV has a (combined) governance, nomination and remuneration committee rather than a separate remuneration committee and
selection and appointment committee as recommended in best practice provision 2.3.2.
• Best Practice Provision 3.1.2: URW NV supports the principle that the remuneration policy should focus on long-term value creation
for URW NV and its business. Rather than setting the shareholding requirement of MB Members to five years, the terms and
conditions of the long-term incentive plans in URW NV awarded to MB Members include a shareholding requirement for the duration
of the MB Member’s mandate because URW NV believes this better ensures continued alignment of interests throughout the
mandate.
• Best Practice Provision 4.3.3: The Company’s MB Members and SB Members are appointed by the General Meeting upon a binding
nomination prepared in accordance with the Articles. The General Meeting may only overrule the binding nomination with a
qualified majority that is higher than what is recommended in this best practice provision. Consistent with the governance practice
at many other listed Dutch companies and because we believe that a decision to overrule a nomination must be widely supported
by our shareholders, the Articles do not provide for a lower voting standard to overrule such nomination than the voting standard
provided for in section 2:133(2) Dutch Civil Code (“DCC”).
As of the financial year starting on or after January 1, 2023 the Code has been updated. It provides for updates in areas such as long-term value
creation, diversity and the role of shareholders. It also contains amended provisions of the Code due to changes in Book 2 of the DCC. For the
financial year 2023 URW NV reports over the Code that became effective as of financial years starting in 2023.
2.1.4 CODE OF ETHICS AND OTHER CORPORATE GOVERNANCE PRACTICES
Ethics is one of the URW Group’s core values and the Group is committed to conducting business in an ethical and fair manner. The URW Group
has a “zero tolerance” principle against all forms of unethical practices, such as inappropriate, disrespectful or unlawful behaviour, corruption,
bribery, influence peddling and human rights violations. The URW Group’s compliance procedures are based on a precise allocation of duties and
responsibilities as well as promotion of compliance awareness through a “tone from the top” approach and active training programmes to ensure
accountability and strict and effective compliance within the URW Group.
URW NV has adopted the Code of Ethics, which applies to the URW Group and which includes the values and principles that each employee,
manager and director of the URW Group must respect and comply with, by virtue of their office, at all times and in all circumstances when acting
within, or in the name of, the URW Group or any third party. These principles include: respect for human dignity and for employees’ work,
respect for the URW Group, respect for law and regulations, loyalty, integrity and avoiding conflicts of interests, and ethics in doing business. It
is the responsibility of each employee, manager and director of the URW Group to regularly review and refresh their knowledge and understanding
of the Code of Ethics of the URW Group, in addition to the required annual e-learning training for all employees. In addition, and as part of
successfully shaping the evolution of the URW culture, enhancing the work environment, and ensuring that we can provide an exceptional
employee experience, URW holds employee pulse surveys in the ongoing effort to understand how to enhance culture and work environment.
The text of this Code of Ethics can be accessed on the Company’s website under Related Documents at the Corporate Governance section.
We actively promote and we have reasonable assurance that our Code of Ethics is effective within the Company. We have, to the best of our
knowledge, no reason to believe that our Code of Ethics was not complied with during the financial year to which this report pertains, noting
that anyone can declare any (potential) breach through our URW Integrity line (https://urw.integrityline.org/) at any time.
URW NV does not voluntarily apply other formal codes of conduct or corporate governance practices.
2.2 REPORT OF THE SUPERVISORY BOARD
The Supervisory Board (“SB”) supervises and advises the Management Board (“MB”) on an ongoing basis and carries its duties in accordance with
the applicable law and regulations and the Articles. In performing its duties, the SB is guided by the interests of URW NV and of the business
connected with it.
2.2.1 COMPOSITION OF THE SUPERVISORY BOARD, INDEPENDENCE, AND DIVERSITY
The SB consists of five members as at December 31, 2023. The SB composition reinforces the Group’s strategy through the members’ expertise
in real estate/asset management, retail, finance, legal and other areas. The range of skills and expertise is summarised in the biographies below.
A Supervisory Board member is appointed for a period of four years and may be reappointed for another four-year period, followed by a
reappointment for two years which may be extended by at most two years. If a new appointment is made after the first eight years, this will be
explained in the annual report.
2.2.1.1 COMPOSITION OF THE SUPERVISORY BOARD AS DECEMBER 31, 2023
Name
Age
Gender
Nationality
Independence
Starting date
Expiry date
21
Role
of term of office
Mr Jean-Marie Tritant
Chair
56
M
French
Non-independent
2021
AGM 2025
Mr Fabrice Mouchel
Vice-Chair
53
M
French
Independent
2021
AGM 2025
Mr Jean-Louis Laurens
Senior Independent Director
69
M
French
Independent
2018
AGM 2026
Ms Aline Taireh
Member
49
F
American
Independent
2018
AGM 2026*
Ms Catherine Pourre
Member
67
F
French
Independent
2021
AGM 2025
*Second mandate as per AGM 2022.
22
SUPERVISORY BOARD MEMBER INFORMATION AND MANDATES HELD AS AT DECEMBER 31, 2023
BORN ON:
November 10, 1967
NATIONALITY:
French
NUMBER OF STAPLED
SHARES HELD:
51,764
33
MR JEAN-MARIE TRITANT
SB MEMBER – CHAIR
Non-independent
• Graduate of Burgundy – Business School (“BSB”) (previously ESC Dijon).
• Master’s Degree from Paris I-Sorbonne University in commercial real estate (a qualification recognis
ed
by the Royal Institution of Chartered Surveyors).
• Started his career at Arthur Andersen Paris.
•
Joined Unibail in 1997. Appointed Managing Director of the Office Division in 2002 and Managing
Director Retail France in 2007.
• Appointed to the management board of Unibail-
Rodamco SE, Chief Operating Officer effective
April 25, 2013, ended on June 7, 2018.
•
Appointed to the MB as President US effective June 7, 2018, following the Westfield Transaction,
ended on November 18, 2020.
• Appointed as Chief Executive Officer of URW SE as of January 1, 2021.
OTHER FUNCTIONS AND MANDATES
OUTSIDE OF THE GROUP
PREVIOUS MANDATES DURING THE LAST 5 YEARS
• Representative of Unibail-
Rodamco-Westfield SE as
Member of the French
Fédération des Entreprises
Immobilières (FEI);
• Non-Executive Director of
Pavillon de l’Arsenal
• Representative of Unibail-
Rodamco-Westfield SE on
the Board of Directors of
Société Paris-Île-de-France
Capitale Économique;
• Representative of Unibail-
Rodamco-Westfield SE on
the Executive Committee of
the Palladio Foundation;
• Director of the European
Public Real Estate
Association (EPRA).
OTHER INTRA-GROUP FUNCTIONS AND
MANDATES
•
Chairman of the
management board and
Chief Executive Officer of
URW SE;
• Chairman of Uni-Expos (SA);
• Director of VIPARIS Holding
(S.A.).
• Member of the management board of URW NV;
• Director and President of WALP Service, Inc., Westfield
America, Inc., Westfield DDC Inc., Westfield
Development
Inc., Westfield Eco Inc., Westfield USA
Centres, Inc., WHL
(USA), Inc. and WHL USA
Acquisitions Inc.;
• Manager and President of URW Airports, LLC, Westfield
Concession Management II LLC, Westfield Gift Card
Management, LLC, Westfield Property Management
LLC and WestNant Investment LLC;
• Director and Chairman of URW America Inc.;
• Director and Chairman of Annapolis TRS Inc., Fashion
Square Service TRS, Inc., GSP Service TRS, Inc.,
Montgomery Service, Inc., VF/UTC Service, Inc., WCL
Holdings, Inc., Westfield Beneficiary 1, Inc., Westfield
Beneficiary 2, Inc., Westfield Subsidiary REIT 1, Inc.,
Westfield Subsidiary REIT 2, Inc., Westland Properties,
Inc., Westland Realty Beneficiary, Inc.;
•
Director of Broward Mall LLC, Roseville Shoppingtown
LLC,
Santa Anita Borrower LLC, Santa Anita GP LLC,
Valencia
Town Center Venture GP, LLC, Westfield
Paramus 1 Inc.;
• Manager and Chairman of URW WEA LLC, West-
OC 2
REIT 1, LLC, West-OC 2 REIT 2, LLC, West-
OC 2 REIT 3,
LLC, URW
Airports, LLC, Westfield, LLC, Westfield
Concession
Management II LLC, Westfield, Gift Card
Management, LLC,
Westfield Property Management
LLC, Westfield U.S.
Holdings, LLC, and WestNant
Investment LLC;
Manager of Annapolis REIT 1 LLC, Annapolis REIT 2 LLC, Annapolis
REIT
3 LLC, Broward Mall LLC, Culver City REIT 1 LLC, Culver City
REIT 2, LLC,
Culver City REIT 3 LLC, Horton Plaza REIT, 1 LLC,
Horton Plaza REIT 2 LLC,
Horton Plaza REIT 3 LLC, Mission Valley
REIT 1 LLC, Mission Valley REIT 2
LLC, Mission Valley REIT 3 LLC,
North County REIT 1 LLC, North County REIT
2 LLC, North County
REIT 3 LLC, Oakridge REIT 1, LLC, Oakridge REIT 2 LLC,
Oakridge
REIT 3 LLC, Plaza Bonita REIT 1 LLC, Plaza Bonita REIT 2, LLC,
Plaza Bonita REIT 3 LLC, Promenade REIT, 1 LLC, Promenade REIT
2 LLC,
Promenade REIT, 3 LLC, Santa Anita REIT 1 LLC, Santa Anita
REIT, 2 LLC,
Santa Anita REIT 3 LLC, Southcenter REIT, 1 LLC,
Southcenter REIT 2 LLC,
Southcenter REIT 3 LLC, Stratford City
Offices (N°.1) LLC, Stratford City
Offices (N°.2) LLC, Stratford City
Shopping Centre (N°.1) LLC, Stratford City
Shopping Centre (N°.3)
LLC, Topanga REIT 1 LLC, Topanga REIT 2 LLC,
Topanga REIT 3 LLC,
West Valley REIT 1 LLC, West Valley REIT 2 LLC, West V
alley REIT
3 LLC, White City Investments (N°. 1) LLC, and White City
Investments (N°. 2) LLC;
•
Director of Descon Invest PTY Limited, Fidele PTY
Limited, Nauthiz PTY
LTD, Westfield America
33
Excluding 5033 Stapled Shares held via the URW SE company saving plan.
23
Management Limited, Westfield American Investments
PTY Limited, Westfield Capital Corporation Finance
PTY LTD,
Westfield Queensland PTY LTD, WFA Finance
(Aust) PTY Limited, and WFD Finance PTY Limited.
Attendance 2023:
• SB 100%
• GNRC 100%
Mandate:
• First Mandate: June 29, 2021 (involved from January 1, 2021)
• Expiry date of term of office: AGM 2025
Further experience:
• Active executive and senior leadership experience
Strong leadership and management skills, having served as President US at URW NV. He has extensive operational experience
after numerous senior positions, including Managing Director Retail France and Chief Operating Officer at former Unibail-
Rodamco SE.
• International experience and regional market exposure
Extensive international experience through various roles. He has a truly international perspective and in-depth knowledge of
regional real estate and retail in the US having lived and worked in the US as former President US at URW NV.
• Retail and consumer product experience
Significant expertise through various senior roles in asset management, including as Head of Asset Management and later
Managing Director Retail and Offices France at former Unibail-Rodamco SE.
• Risk oversight and corporate Governance Experience
Experience through various senior roles in the industry and as a management board member on a France and a Dutch listed
company, including experience on risk oversight and corporate governance practices.
BORN ON:
April 16, 1970
NATIONALITY:
French
NUMBER OF STAPLED
SHARES HELD:
31,811
34
MR FABRICE MOUCHEL
SB MEMBER – VICE-CHAIR
Independent
• Graduate of HEC Business School, master’s degree in law and bar diploma (CAPA:
certificat d’aptitude
à la profession d’avocat).
• Lawyer in the Mergers & Acquisitions Department of Gide Loyrette & Nouel (1993-1996).
• Vice-President of Mergers and Acquisitions at ING-Barings (1997-2001).
• Joined Unibail in 2001 as Head of Corporate Development.
• Became Head of Financial Resources and Investor Relations Department in 2002.
• Deputy CFO from June 2007 to April 2013.
• Appointed to the Unibail-
Rodamco SE MB as Deputy CFO in March 4, 2013 (effective on April 25, 2013)
and as Group Finance Director on June 7, 2018.
• Appointed as Chief Financial Officer of URW SE as of January 5, 2021.
OTHER FUNCTIONS AND MANDATES OUTSIDE OF
THE GROUP
PREVIOUS MANDATES DURING THE LAST FIVE YEARS
•
N/A •
Managing Director of SCS Liegenschaftsverwertung
GmbH, SCS Motor City Errichtungsges.m.b.H.;
•
SB Member of Rodamco Deutschland GmbH,
Director of Rodamco Deutschland GmbH & Co Süd
Liegenschafts KG;
•
Director of Westfield Investments Pty Limited,
Nauthiz Pty Ltd, Westfield UK Investments Pty
Limited, Westfield UK 1 Pty Limited, Westfield UK
2 Pty Limited, Westfield UK 3 Pty Limited, Westfield
UK 4 Pty Limited, Westfield UK 5 Pty Limited,
Westfield UK 6
Pty Limited, Fidele Pty Ltd,
Westfield R.S.C.F. Management Pty Ltd, Westfield
Developments Pty Ltd.
OTHER INTRA-GROUP FUNCTIONS AND MANDATES
• Member of the management board and CFO of
URW SE;
• Joint Director of Unibail-
Rodamco Investments
B.V., Unibail-
Rodamco Investments 2 B.V.,
Cijferzwaan B.V.,
Dotterzwaan B.V., Real
Estate Investments Poland Coöperatief U.A.,
Rodamco Project I BV, Stichting Rodamco,
Traffic UK B.V., Rodamco Europe Finance
B.V., Rodamco Nederland Winkels B.V.,
Deputy Board Member of Unibail Rodamco
Poland 5 B.V., Director of U&R
Management
B.V;
•
Member of the Board of Directors of Rodamco
Sverige AB;
•
Director of Cavemont Pty Limited, Descon
Invest Pty Limited, Westfield Corporation
Limited, Westfield American Investments Pty
34
Excluding 8,885 Stapled Shares held via the URW SE company saving plan.
24
Limited, Westfield Capital Corporation
Finance Pty Ltd,
Westfield Queensland Pty.
Ltd
, WCL Finance Pty Limited, WCL
Management Pty Limited, Westfield America
Management Pty Ltd;
• Managing Director of DZ-Donauzentrum Besitz-
und Vermietungs-
GmbH, Shopping Center
Planungs-
und Entwicklungsgesellschaft
m.b.H. & Co. Werbeberatung KG, Shopping
Center Planungs- und Entwicklungs-
gesellschaft mbH, Shopping City Süd
Erweiterungsbau Gesellschaft m.b.H. & Co.
Anlagenvermietung KG, Unibail-
Rodamco
Austria Verwaltungs GmbH, URW Invest GmbH,
Unibail-Rodamco Invest GmbH;
• Vice-President of the SB of Unibail-Rodamco-
Westfield Germany GmbH, Managing Director
of Rodamco Deutschland GmbH;
• Director of Liffey River Financing Ltd.;
•
Director of Crossroads Property Investors S.A.
Attendance 2023:
• SB 100%
• AC 100%
• GNRC 100%
Mandate:
• First Mandate: June 29, 2021 (involved from February 4, 2021)
•
Expiry date of term of office: AGM 2025
Further experience:
• Relevant active executive or senior leadership experience
Significant senior leadership experience as vice-president of mergers and acquisitions at ING-Barings and Head of Corporate
Development at Unibail-Rodamco SE.
• Financial expertise
High level of financial and capital markets experience gained through various positions, including as vice-president of mergers
and acquisitions at ING-Barings and later as Head of Financial Resources and Investor Relations department at Unibail-Rodamco
SE. In-dept knowledge of the industry having served as Deputy Chief Financial Officer and Group Finance Director at Unibail-
Rodamco SE.
• Risk oversight/compliance expertise
Seasoned executive with 20 years of expertise through senior roles in finance at Unibail-Rodamco SE.
• Real Estate Market Experience
Extensive experience in the European market through 20-year career in the industry having served as Deputy Chief Financial
Officer and Group Finance Director.
• Corporate Governance
Former member of the management board of Unibail-Rodamco SE.
25
BORN ON:
August 31, 1954
NATIONALITY:
French
NUMBER OF STAPLED
SHARES HELD:
363
MR JEAN-LOUIS LAURENS
SENIOR INDEPENDENT DIRECTOR & AC CHAIRMAN
Independent
• Graduate of HEC Business School.
• Doctorate in Economics and a Master’s in law.
• Former Executive Director of Morgan Stanley International.
• Former CEO of AXA Investment Managers France.
•
Former CEO of Robeco France and former Global Head of Mainstream Investment of Robeco Group
(until 2009).
OTHER FUNCTIONS AND MANDATES
PREVIOUS MANDATES DURING THE LAST FIVE YEARS
Listed Company
• None
Other Company
• Chairman of Blulog, Sp.z. (Poland)
•
Chairman of A4P Technologies SA
(Luxembourg)
•
Member of the supervisory board Andera
Partners (France)
•
Member of the board of directors Crédit
Mutuel Investment Management (France)
•
Member of the supervisory board of Vidi
Capital (France)
• Former supervisory board vice-
chairman
and audit committee chairman of URW SE
(until 2018)
• Non-
executive chairman of the board of
directors of Unigestion Asset Management
(France)
•
Chairman of the Supervisory Board Crover
World (June – October 2022)
Attendance 2023:
• SB 100%
• AC 100%
Mandate:
• First Mandate: June 7, 2018
• Second Mandate: June 22, 2022
•
Expiry date of term of office: AGM 2026
Further experience:
• Active executive and senior leadership experience
Extensive senior leadership experience as general partner and global head of asset management of Rothschild and Co Group,
global Head of mainstream investments at Robeco Group and CEO of AXA Investment Managers.
• Financial expertise
Extensive financial and capital markets expertise as a former chief executive of major asset management companies and
numerous senior positions in investment banks such as HSBC and Morgan Stanley.
• Risk oversight/compliance expertise
Extensive expertise through various senior roles in asset management and investment banking, including CEO of Banque
Internationale de Placement and CEO of Banque Robeco and gained important insights into governance, risk management and
regulation.
• International Experience
Extensive international experience through various Global Head roles and work experience in Germany, the Netherlands and the
US.
• Corporate Governance Experience
Former member of the Ethics and Governance Committee of MEDEF, the French employers association (10-year tenure). Co-
author of the AFEP-MEDEF code of governance.
26
BORN ON:
January 15, 1975
NATIONALITY:
American
NUMBER OF STAPLED
SHARES HELD:
1,345 (incl. 305 stapled
shares held through CDI’s)
MS ALINE TAIREH
SB MEMBER
Independent
• Bachelor of Arts in Criminology and Psychology from University of California Irvine.
• Juris Doctorate Degree from Brooklyn Law School, New York.
• Associate with O’Melveny & Myers LLP, Los Angeles, CA.
• Joined Westfield as Senior Corporate Counsel in January 2007 and was
appointed Associate and General
Counsel in January 2008.
• Appointed Senior Vice President and Deputy General Counsel of Westfield effective June 2012.
• Appointed General Counsel US on June 7, 2018.
OTHER INTRA-GROUP FUNCTIONS AND MANDATES
PREVIOUS MANDATES DURING THE LAST FIVE YEARS
• Director of Broward Mall LLC, Roseville Shoppingtown
LLC;
Santa Anita Borrower LLC, Valencia Town Center
Venture GP LLC;
• Manager of
Annapolis REIT 1 LLC, Annapolis REIT 2
LLC, Annapolis REIT 3 LLC, Culver City REIT 1 LLC,
Culver City REIT 2 LLC, Culver City REIT 3 LLC, North
County REIT 1 LLC, North County REIT 2 LLC, North
County REIT 3 LLC, Oakridge REIT 1 LLC, Oakridge REIT
2 LLC, O
akridge REIT 3 LLC, Plaza Bonita REIT 1 LLC,
Plaza Bonita REIT 2 LLC, Plaza Bonita REIT 3 LLC,
Promenade Service LLC, Southcenter REIT 1 LLC,
Southcenter REIT 2 LLC, Southcenter REIT 3 LLC,
Topanga REIT 1 LLC, Topanga REIT 2 LLC, Topanga
REIT 3 LLC, URW WEA LLC, West-OC REIT 1 LLC, West-
OC REIT 2 LLC, West-
OC REIT 3 LLC, West Valley REIT
1 LLC, West Valley REIT 2 LLC, West Valley REIT 3 LLC;
Mission Valley REIT 1 LLC, Mission Valley REIT 2 LLC,
Mission Valley REIT 3 LLC;
•
EVP, General Counsel and Secretary of Fashion Square
Service TRS INC.; Montgomery Service Inc.; URW WEA
LLC; VF/UTC Service Inc.; WCL Holdings Inc.; West-
OC
2 REIT 1 LLC; West-OC 2 REIT 2 LLC; West-
OC 2 REIT 3
LLC; West Valley REIT 1 LLC; West Valley REIT 2 LLC;
West Valley REIT 3 LLC; Westfield America G.P. II LLC;
Westfield LLC; Westfield U.S. Holdings LLC; Wes
tfield
Properties LLC; Westfield Realty Beneficiary Inc.
• Manager of Horton Plaza REIT 1 LLC; Horton Plaza REIT
2 LLC; Horton Plaza REIT 3 LLC; Promenade REIT 1
LLC; Promenade REIT 2 LLC; Promenade REIT 3 LLC;
Santa Anita REIT 1 LLC; Santa Anita REIT 2 LLC; Santa
Anita REIT 3 LLC; Mission Valley REIT 1 LLC, Missi
on
Valley REIT 2 LLC; Mission Valley REIT 3 LLC; Director
of Santa Anita GP LLC;
•
EVP, General Counsel and Secretary of Westfield
Beneficiary 1 Inc.; Westfield Beneficiary 2 Inc.;
Westfield
Subsidiary REIT 1 Inc.; Westfield Subsidiary
REIT 2 Inc.
Attendance 2023:
• SB 100%
Mandate:
• First Mandate: June 7, 2018
• Second Mandate: June 22, 2022
• Expiry date of term of office: AGM 2026
Further experience:
• Relevant active executive and senior leadership experience
Extensive operational and leadership experience as General Counsel of Westfield and various executive and director positions
with all aspects of the US business including shopping centre
operations, financings, joint venture relationships and development
matters. Significant focus on sustainability, diversity, talent and change management, in both executive and non-executive
positions.
• International experience and regional market exposure
Significant experience in international operations as well as local market exposure in the US since joining Westfield in 2007 with
in-depth knowledge in the US real estate and retail market, which are increasingly important given the US portfolio of flagship
destinations.
• Real estate and real estate asset management experience
Extensive strategy expertise in real estate development, investment, leasing, management, and divestment through her role as
Senior Corporate Counsel, Associate General Counsel, Deputy General Counsel and General Counsel of Westfield. US market
expert through 20+-year career with key leadership to drive change management to successfully adopt management practices in
order to ensure organisational success.
• Legal and Financial expertise
In-depth knowledge of operations that are international and complex, with financing transactions, group debt and refinancing in
different countries and currencies.
• Risk oversight and compliance
20+ years of experience in the US real estate and retail market has brought deep knowledge of the US market, including real
estate property acquisitions, secured and unsecured financing transactions, joint ventures, litigation and all other legal and
process matters.
27
BORN ON:
February 2, 1957
NATIONALITY:
French
NUMBER OF STAPLED
SHARES HELD:
105,446
MS CATHERINE POURRE
SB MEMBER & AC MEMBER & GNRC CHAIR
Independent
• Graduate of ESSEC Business School.
• Law degree from Université Catholique de Paris.
• Graduate French Expertise Comptable (French CPA).
• Former Audit & Consulting Partner at PricewaterhouseCoopers (1989 – 1999).
•
Former Consulting Partner at Ernst & Young and former Executive Director and Member of the
Executive Committee at Cap Gemini Ernst & Young (1999 – 2002).
• Former Deputy Managing Director and member of the Executive Committee of Unibail (2002 - 2007).
• Former Management Board member and Chief Resources Officer at Unibail-Rodamco SE (2007 -
2013).
• Designated as independent SB Member at URW N.V. in February 2021.
OTHER FUNCTIONS AND MANDATES
PREVIOUS MANDATES DURING THE LAST FIVE YEARS
Listed Company
•
Member of the supervisory board of SEB
SA (France); Chair of the Audit
Committee; Member of the Governance
and
Remuneration Committee; Member
of the Strategy & Sustainability
Committee;
•
Member of the supervisory board of
Bénéteau SA (France), Chair of the Audit
Committee, Member of the Strategy
Committee.
Other Company
•
Member of the management board of
CPO Services (Luxembourg).
•
Member of the supervisory board of Neopost SA (France)
(until 2019);
•
Member of the supervisory board of Crédit Agricole SA
(France); Chair of the Audit Committee; Member of the
Risk Committee; Member of the Strategy &
Sustainability
Committee (until May 2022);
•
Member of the supervisory board of Crédit Agricole
Corporate and Investment Bank (France); Chair of the
Audit Committee; Member of the Risk Committee;
Member of the Remuneration Committee; Member of the
Governance and Nomination Committee (Until May
2023).
Attendance 2023:
• SB 100%
• AC 100%
• GNRC 100%
Mandate:
• First Mandate: June 29, 2021 (involved from February 4, 2021)
• Expiry date of term of office: AGM 2025
Further experience:
• Active executive and senior leadership experience
Extensive senior leadership experience as Management Board member of Unibail-Rodamco Group and global Head of Consulting
for High Growth companies at Pricewaterhouse and then Cap Gemini Consulting.
• Financial expertise & real estate experience
Extensive financial expertise as a French CPA and a former Chief Financial Officer at Unibail as well as Chair or Member of
numerous Audit Committees of Boards of listed companies including a systemic financial institution.
Extensive experience in real estate development, investment, leasing, management,
and divestment as a former Management Board member
of Unibail-Rodamco Group.
• Risk Oversight and Compliance expertise
Extensive Risk, internal Control and compliance expertise as a consulting partner at PricewaterhouseCoopers and Cap Gemini
Consulting, as well as former Chief Resources Offices at Unibail-Rodamco and as a member of Audit, Risks and Compliance
Committees in various Boards of listed companies including a systemic financial institution.
• International Experience
Extensive international experience through various senior roles and work experience in the US, the Netherlands, Germany,
Luxembourg and France.
• Corporate Governance Experience
Extensive corporate Governance experience through various senior roles as Management Board member and Supervisory Board
member in major listed companies.
28
DIVERSITY
URW NV has diversity policies with respect to the composition of the MB and the SB and has updated these policies in line with the Dutch Diversity
Act and updated Dutch Corporate Governance Code. URW NV is committed to supporting, valuing, and leveraging the value of diversity, but also
believes that there is a fine line between diversity and unintentional discrimination. For that reason, the importance of diversity, in and of itself,
should not set aside the overriding principle that someone should be recommended, nominated and appointed for being “the right person for the
job”. URW NV believes that it is important for the MB and the SB to represent a diverse mix of backgrounds, experiences, qualifications,
knowledge, abilities and viewpoints.
URW NV seeks to combine the skills and experience of long-standing members of the MB and/or the SB with the fresh perspectives, insights, skills
and experiences of new members. URW NV strives for gender diversity and a mix of ages in the composition of those bodies. In addition to age
and gender, the Company recognises and welcomes the value of diversity with respect to race, ethnicity, nationality, sexual orientation and
other important cultural differences. URW NV is committed to seeking broad diversity in the composition of the MB and the SB and will consider
these attributes when evaluating new candidates in the best interests of the Company and its stakeholders. In terms of experience and expertise,
URW NV intends for the MB and the SB to be composed of individuals who are knowledgeable in one or more specific areas of strategic importance
to the Company.
New Dutch legislation is aimed at improving gender diversity in listed companies, among others by imposing a quota of at least one-third for both
women and men on the SB. We recognise the importance of diversity and inclusion; a diverse and inclusive workforce provides the necessary mix
of points of view required to continue to innovate and drive our Company’s business forward. URW NV believes that it is valuable that and strives
to achieve a situation in which the experience and expertise as well as diversity and inclusion are embedded at all levels of the Company. URW
embodies an inclusive vision for its business as well as its employee community as laid down in the URW Diversity Charter. In 2022 the Company
set diversity targets for the SB, MB and senior management positions in adherence with the URW Diversity Charter and in line with Dutch law
applicable as per January 1, 2022, the SB shall pursue that at least one third of the SB seats shall be held by each gender. The MB shall pursue
that at least 40% of the total MB and senior management positions shall be held by women and no more than 60% by men by 2025.
The composition of the SB over the year 2023 is such, that URW NV’s diversity objectives have been achieved, including meeting the statutory
target of one third of the SB comprising female SB Members. The selection of SB members is based on the required profile and their backgrounds,
experiences, qualifications, knowledge, abilities, and viewpoints without positive or negative bias on gender.
The composition of the MB and senior management as a group, with a 76%/24%
35
male/female gender balance in 2023, diverges from the diversity
target pursued by the MB. This is partly due to the limited size of the MB, with only two members, and because URW NV continues to appoint
and nominate, as applicable, the best candidates for these respective positions. More than for re-appointments, whereby experience and good
performance are weighing heavily on the decision, new appointments will offer opportunity to re-balance the composition in view of fair and
equal gender representation in due course. Targets set for (gender) diversity will be taken into consideration when there are vacancies in the
MB, and senior management positions to strive for a 60/40 gender balance by 2025 as outlined above.
Diversity and inclusion also form a key part of the URW Better Places 2030 strategy. With a representation in 2 continents, we welcome employees
from different parts of the world, from diverse cultures and backgrounds to build successful and inclusive teams. URW commits to ensuring full
equal opportunities (e.g. gender, nationality, sexual orientation) in HR practices and processes Group-wide. The Group stands for a fair overall
outcome that rewards individual and collective performance and does not discriminate on race, gender, nationality or any other personal criteria.
The Be You at URW framework for example aims to fully embed the Group’s commitment to drive even greater diversity and inclusion across the
business and focuses on four key areas: leadership & commitment, inclusion policies & performance, employee development & learning and
culture & employee engagement. In 2022, webcasts for International Women’s Day, gender equality activities in all regions, and LGBTQ+ Pride
activities in the US, were held. Also, the URW employee pulse Survey was rolled out to all employees in 2022, including a focus on diversity and
inclusion. An employee survey is rolled out each year to check in with the global employee community and help shape effective plans to create
an even more inclusive working culture.
For a more detailed understanding and explanation in respect to the diversity and inclusion policy complies with the URW Group policies and
reference is made to the URW Sustainability Report.
The Supervisory Board (“SB”) annually considers its own composition considering many elements. As part of its annual assessment, the GNRC and
the SB conduct a review of SB member profile to ensure that the SB is able to fulfil its responsibilities and obligations in the best possible
conditions. The profile reflects the desired composition of the SB, in particular about the strategy pursued by the Group and the objectives to
be achieved (including through the SB succession plan) in order to form and maintain a predominantly independent SB, distinguishing itself by
the diversity of its members in terms of gender, age and nationality, as well as their skills, expertise and experience. The SB and the GNRC
consider that SB members collectively have the right balance of skills, expertise, and experience to ensure effective oversight of activities and
to provide relevant advice to the Management Board to fulfil their obligations in the interest of the Company.
A. SIZE OF THE SB
The SB considers that the current number of five members is relevant for the Company and allows for optimum functioning. The SB wishes to
have enough members to have diverse profiles, with eclectic perspectives and horizons while preserving a real proximity between its members,
allowing quality of discussions and agility essential in its proper functioning. As of December 31, 2023, the SB comprises five members.
B. AGE / SENIORITY
The SB shall monitor during discussions on (i) the SB succession plan, (ii) the typical profiles/competencies of SB members as established in its
Charter and (iii) the SB evaluation, including amongst others to respect a diversity in the age.
C. DIVERSITY (GENDER, NATIONALITY AND CULTURE)
The SB composition seeks a balanced representation of women and men. In accordance with the Dutch Diversity Act, to promote diversity at the
top of the business community, at least one third of the supervisory board of listed companies must consist of men and at least one third of
women. At year-end 2023, the SB meets URW NV’s diversity objectives, including meeting the statutory target of one third of the SB comprising
female SB Members. The selection of SB members is based on the required profile and their backgrounds, experiences, qualifications, knowledge,
abilities, and viewpoints without positive or negative bias on gender.
35
Composition of this group has been adjusted to the equivalent at the URW Group and is smaller than in 2022.
29
As at December 31, 2023
Portion of women
40%
Portion of men
60%
D. SKILLS OF THE SUPERVISORY BOARD MEMBERS
The SB has identified the skills, experiences and expertise essential to best carry out its supervisory role as well as its duties, in light of the
nature and scope of the international operations of the Group, the Group’s strategy for the medium and long-term and the related risks.
• Active executive and senior leadership experience
• Financial expertise & real estate experience
• Legal, Risk Oversight and Compliance expertise
• International Experience and regional market experience
• Corporate Governance Experience
• Real estate and real estate asset management experience
• Retail and consumer product experience
E. INDEPENDENCE
Considering inter alia the Stapled Share structure, current practices at URW SE and URW NV, and the interest of the URW Group and its
stakeholders, the Chair of the Supervisory Board is considered non-independent. Even though the composition of the SB partly relates to the fact
that URW SE and URW NV together form the URW Group, after careful review it can be confirmed that as at December 31, 2023, the majority of
the SB members can be considered independent within the meaning of principle 2.1.8 of the DCGC.
As at 31/12/2023
Criteria Dutch Corporate Governance Code
Qualification
Mr. Jean-Marie Tritant
Non-independent
Mr. Fabrice Mouchel
Independent
Mr. Jean-Louis Laurens
Independent
Mrs. Catherine Pourre
Independent
Mrs. Aline Taireh
Independent
2.2.2 SB MEETINGS AND ACTIVITIES
The SB held 6 meetings in 2023 (including ad hoc meetings). Overall average member attendance at its meetings was 100%. In addition to the
matters within its statutory scope, the SB discussed all major actions carried out in 2023, both internally (e.g. organisational matters, risk
management, compliance and Anti-Corruption Program, 2023 half year results, internal audits) and externally (Group strategy, refurbishment
projects, operations, financial position, Dutch Corporate Governance Code requirements) with specific attention to the evolution of the
deleveraging strategies, including disposals and ways to ensure access to capital markets and the rotation of the statutory auditor. The Company’s
statutory auditor during the financial year 2023 attended 6 meetings.
SB Members were also informed of the work and recommendations of its specialised committees and that of the Company’s statutory auditor.
The minutes and documents of all the meetings of URW NV’s Audit Committee (AC) and URW NV’s Governance, Nomination and Remuneration
Committee (GNRC) are systematically made available to all SB Members through a secure electronic platform.
The joint URW SB annual Strategy Retreat in 2023 was held in Hamburg, Germany. With focus on the deleveraging plan, sustainability and energy
action plan and digital and data strategy. In July 2023 a joint URW Group SB training session was held, with specific focus on sustainability and
regulations, compliance and governance.
30
Principal responsibilities of the SB
Key areas discussed, reviewed and/or approved in 2023
Group Strategy
• Strategic initiatives relating to the balance sheet,
including deleveraging and access to capital;
• Change of market of reference to Euronext Paris by delisting from
Euronext Amsterdam;
• Refurbishment, investment, divestment and operations;
• Regular updates: on share price evolution and business
activities, including updates on the conflict in Ukraine
and related restrictions (operations, finance, human
resources, legal, CSR, development, IT and data
strategy, compliance and risk management, including
sanctions list, etc.);
• Implementation of the redesigned CSR Strategy “Better
Places 2030”.
Group Financial Policy and Financial Performance and Reporting
• Review and discussion of the deleveraging programme;
• 2023 Budget and 5-
year Business Plan, financial
resources and borrowing requirements;
• Follow-up on NAV and EPRA performance measures;
• Financial commitments and guarantees;
• Provisions for risk and litigation;
• The Group’s dividend policy (as part of the dividend
policy of the URW Group) and annual allocation of
results;
• Approval of 2022 consolidated full-year results, statutory
financial statements and half-year accounts for the 2023
financial year;
• Relationship with URW NV’s statutory auditor including
auditor’s reporting for the coming year;
• Non-
audit services provided by URW NV’s statutory
auditor;
• Refurbishment pipeline in the context of overall balance
sheet planning and rating agencies;
• Liquidity forecasts and Loan-to-Value (LTV) ratio;
• Regular tax updates.
Internal Audit, Risk Management and Control Systems
• Monitoring risk management, internal audit,
compliance, and insurance programmes;
• 2023 internal audit plan;
• Internal audits, internal control system and compliance
matters;
• In-depth review of the Group’s risk management and
update of the risk mapping;
• Focused review of selected risk management topics
(2023 focus included: REIT status and Tax compliance,
Access to Capital and Financing Market Disruption, and
Corruption, Money Laundering and Fraud).
Governance and Compliance with Relevant Laws and
Regulations
• Updates to the URW Group’s compliance programme
(including the URW Group’s part in fighting forced
labour) and completing the Group Compliance and Group
Anti-Corruption Programme training;
• Compliance with the updated
Dutch Corporate
Governance Code
• Review of the independence of SB Members;
• Regular updates on regulatory/legal changes, including
the follow up of the Dutch Diversity Act;
• Review and
confirming absence of related party
agreements.
Succession Planning
•
Annual review of the SB and committee profile and
composition and rotation;
• Succession planning and overall composition of the SB
and MB;
• SB Member selection/recruitment process.
Group Remuneration Policy and Performance Assessments
• 2023 MB Member remuneration and update MB
remuneration policy (including FI, level of attainment of
annual STI and LTI targets);
• Annual evaluation of the functioning of the MB;
• Annual evaluation of the functioning of the SB (self-
assessment process).
Human Resources
• Talent management, including recruitment and
mobility;
•
Diversity and inclusion.
31
Shareholder Outreach and Engagement
• Shareholder and proxy advisor engagement and feedback
(including 2023 AGM voting items and the proposed
capital raise) and corporate governance roadshow and
communications;
• Updates on shareholder composition;
• Updates to the Shareholder Engagement Guidelines and
review of the Stakeholder Dialogue Policy;
• AGM materials (agenda, resolutions, etc.);
•
Annual Report 2022.
32
2.2.3 SB BOARD COMMITTEES
The SB has established three committees: the AC, the GNRC and the Investment Committee (“IC”).
2.2.3.1 AUDIT COMMITTEE (AC)
The AC assists and advises the SB on its audit duties and prepares its decisions in this regard. The duties of the AC include reviewing and discussing
the effectiveness of internal risk management and control systems and the financial information to be disclosed by URW NV. The AC also monitors
the MB with regard to URW NV’s compliance programme with recommendations and observations of internal and external auditors, URW NV’s
compliance with applicable laws and regulations, the functioning of the internal audit department (if applicable), URW NV’s tax policy, URW NV’s
application of information and communication technology and URW NV’s financing. In addition, it maintains regular contact with and supervises
URW NV’s statutory auditor, including her independence, and it advises the SB regarding the external auditor's nomination for (re)appointment
by the General Meeting.
The roles and responsibilities of the AC as well as the composition and the manner in which it discharges its duties are set out in a committee
charter (each a “Committee Charter”) and, in part, in the SB rules governing the organisation, decision-making and other internal matters of the
SB (the "SB Rules"). Pursuant to a resolution to that effect, the SB may, with the approval of the URW SE Supervisory Directors, amend or
supplement the Committee Charter and allow temporary deviations.
AUDIT COMMITTEE COMPOSITION
As at December 31, 2023, the AC consists of three members:
• Mr Jean-Louis Laurens (Chair);
• Mrs Catherine Pourre; and
• Mr Fabrice Mouchel.
The members of the AC are appointed and dismissed by the SB on the basis of a binding recommendation by the GNRC. At least one member of
the AC must have competence in accounting and/or auditing. More than half of all the members of the AC, including the chair of the AC, must
be independent from URW NV (including within the meaning of the Dutch Corporate Governance Code). The chair of the AC shall not be the chair
of the SB or a former MB Member.
AUDIT COMMITTEE MEETINGS AND ACTIVITIES
The AC shall meet at least quarterly and otherwise as often as any of the SB Members deems necessary or appropriate. At least once a year, the
AC meets with the Company’s statutory auditor without any of the MB Members being present. During the financial year 2023, the AC met 7 times
in order to carry out its responsibilities. Overall attendance was 100%. The Company's statutory auditor attended 6 meetings.
AC members receive the meeting documents which include a detailed agenda and comprehensive papers timely before each meeting. To allow
for optimal preparation for the review of the accounts, the AC meets prior to the SB meeting at which the full-year and half-year financial
statements are reviewed. The SB is informed of the proceedings and recommendations of the AC at its meeting directly following that of the AC.
Principal responsibilities of the AC
Key areas discussed, reviewed and/or recommended for approval to the SB in 2023
Group Financial Policy
• Strategic initiatives to the balance sheet, including deleveraging, access
to capital;
• Extensive review and follow-
up of financial, borrowing, accounting and
tax aspects;
• 2023 Group Budget;
• Follow-up on NAV and EPRA performance measures;
•
The Group’s dividend policy (as part of the dividend policy of the URW
Group) and annual allocation of results;
•
Relationship with the external auditor including auditor’s reporting for
the coming year;
• Review and assessment of external auditor;
•
Non-audit services provided by URW NV's external auditor.
Financial Performance and Reporting
•
Review and discussion of the disposal programme;
• 2022 consolidated full-
year results and statutory financial statement and
half-year accounts for the 2023 financial year;
• Financial commitments and guarantees;
• Provisions for risk and litigation;
• Regular tax updates;
• Regular updates on regulatory/legal changes including legal audit reform;
•
Refurbishment pipeline in the context of overall balance sheet planning
and rating agencies;
• Liquidity forecasts and Loan-to-Value (LTV) ratio.
Internal Audit, Risk Management and Control Systems
• Monitoring risk management, internal audit, compliance, and insurance
programmes;
• Updates on digital and IT strategy, tools and projects;
• 2023 internal audit plan;
• Internal audits, internal control system and compliance matters;
• In-depth review of risk management and update of the risk mapping;
• Focused review of selected risk management topics (2023 focus included:
REIT status and Tax Compliance; A
ccess to Capital and Financial Market
Disruption; Corruption, Money Laundering & Fraud).
33
AC Governance
•
Annual evaluation of the functioning and efficiency of the AC (self-
assessment process).
2.2.3.2 THE GOVERNANCE, NOMINATIONS AND REMUNERATION COMMITTEE (GNRC)
The GNRC assists and advises the SB on its duties regarding the nomination of MB Members and SB Members. It is charged with drawing up
selection criteria and appointment procedures for the MB Members and SB Members. Furthermore, it periodically assesses the size and
composition of the MB and the SB, and make proposals for the composition profile of the SB. In addition, the GNRC periodically assesses the
functioning of individual MB Members and SB Members, and reports on such review to the SB. It is also charged with making proposals for
(re)appointment or dismissal of MB Members and SB Members as well as for the election or dismissal of the Chair and Vice-Chair of the SB. The
GNRC supervises the policy of the MB regarding the selection criteria and appointment procedures for URW NV's senior management.
The GNRC further assists and advises the SB on its duties regarding the remuneration of the MB Members and the SB Members. The duties of the
GNRC include preparing proposals for the SB concerning the remuneration policy for the MB Members, the remuneration of the individual MB
Members within the framework of the remuneration policy as adopted by the General Meeting, and the remuneration of individual SB Members
subject to approval by the General Meeting.
In addition, the GNRC periodically reviews and assesses the adequacy of the corporate governance practices, policies and rules of URW NV and
its subsidiaries and makes recommendations to the SB on all matters of corporate governance (including on any remedial actions to be taken).
The roles and responsibilities of the GNRC as well as the composition and the manner in which it discharges its duties are set out in a committee
charter (each a “Committee Charter”) and, in part, in the SB Rules. Pursuant to a resolution to that effect, the SB may, with the approval of the
URW SE Supervisory Directors, amend or supplement the Committee Charter and allow temporary deviations.
GOVERNANCE, NOMINATION AND REMUNERATION COMMITTEE COMPOSITION
As at December 31, 2023, the GNRC consists of three members, including two URW SE Supervisory Directors:
• Mrs Catherine Pourre (Chair);
• Mr Jean-Marie Tritant; and
• Mr Fabrice Mouchel.
The members of the GNRC are appointed and dismissed by the SB on the basis of a binding recommendation by the GNRC.
GOVERNANCE, NOMINATIONS AND REMUNERATION COMMITTEE MEETINGS AND ACTIVITIES
The GNRC held two meetings in 2023 (including ad hoc meetings). Overall attendance was 100%.
Principal responsibilities of the GNRC
Key areas discussed, reviewed and/or recommended for approval to the SB
in 2023
Company Remuneration Policy and performance assessments
• 2023 MB Member remuneration (including FI, level of
attainment of annual STI and LTI targets);
•
2023 LTI envelope.
Shareholder outreach and engagement
• Shareholder engagement and feedback (including as relates to
governance and remuneration);
• Updates to the
Shareholder Engagement Guidelines and
review of the Stakeholder Dialogue Policy;
•
AGM materials (remuneration policy update and
renewals/appointments).
GNRC Governance
• Evaluation of the functioning and efficiency of the MB;
• Review of the SB and
committee profile and composition and
rotation;
•
Succession planning (selection and nomination process) and
overall composition of the SB and MB.
Governance and compliance with relevant laws and regulations
•
Regular updates on
regulatory/legal changes, including the
follow-up and implementation
of the Dutch Diversity Act and
the updated Dutch Corporate Governance Code.
2.2.3.3 INVESTMENT COMMITTEE (IC)
The SB Members who are members of the IC are authorised to pass resolutions on behalf of the SB to approve resolutions of the MB concerning
certain transactions and actions by URW NV or its subsidiaries up to certain amounts, as listed in more detail in the SB rules.
INVESTMENT COMMITTEE COMPOSITION
As at December 31, 2023, the IC consists of three members, including two URW SE Supervisory Directors:
• Mr Jean-Marie Tritant (Chair);
• Mr Fabrice Mouchel; and
• Ms Aline Taireh.
The members of the IC are appointed and dismissed by the SB, upon the binding recommendation of the GNRC.
INVESTMENT COMMITTEE MEETINGS AND ACTIVITIES
34
The IC meets as often as any of its members deems necessary or appropriate.
2.2.4 EVALUATION OF THE SUPERVISORY BOARD
SUPERVISORY BOARD EVALUATION PROCESS
An assessment of the SB is carried out annually. Over the year ending December 31, 2023 an annual assessment of the performance and overall
functioning of the SB and its committees, and of the MB and its members was held. Following the assessment over the year ending December 31,
2023, the SB is generally satisfied with the overall functioning of the SB and its respective members, including the interaction with its committees
and with the MB. Overall, over the year ending December 31, 2023 it was concluded the SB functioned well.
2.2.5 CONFLICTS OF INTEREST
NO CLOSE FAMILY RELATIONSHIPS
To the knowledge of the Company, there are no family ties between the SB Members or MB Members of the Company.
MANAGEMENT OF CONFLICTS OF INTEREST
To the knowledge of the Company, there are no conflicts of interest or potential conflicts of interest between the Company and the SB Members
and/or MB Members with respect to their personal interests or their other obligations. During the financial year 2023, there were no transactions
in respect of which there was a conflict of interests with any MB Member or SB Member that is of material significance to URW NV and/or to such
MB Member or SB Member. Where applicable, best practice provision 2.7.5 of the DCGC concerning related party transactions with significant
shareholders has been observed.
In order to ensure that each SB Member and MB Member acts with loyalty, independence and professionalism, each SB Member and MB Member
must immediately report any actual or potential conflicts of interest with the Company in a transaction that is of material interest to URW NV
and/or to such MB Member or SB Member to the Chairman of the SB and the other MB Members (in the case of an MB Member) or to the other SB
Members (in the case of an SB Member), respectively, providing all relevant information relating to such transaction. An SB Member or MB Member
with a conflict of interest must not participate in the deliberations and the decision-making of the SB or the MB, respectively, on a matter in
relation to which he/she has a conflict of interest.
Additionally, the MB Members must seek SB approval before accepting a position as managing, executive, supervisory or non-executive director
(other than at a group company of URW NV). SB Members must notify the SB in advance of any other managing, executive, supervisory or non-
executive position he/she wishes to pursue, and such other positions are discussed at an SB meeting at least annually.
The SB Members and the MB Members are also subject to the rules established in the URW Group’s Code of Ethics and Anti-Corruption Programme
applicable to all URW Group directors, managers and employees.
In July and December 2023 URW Group SB training sessions were held in which the URW NV SB members participated, including on the URW’s
Code of Ethics and Anti-Corruption Programme, and the Environmental, Sustainable and Corporate Governance Strategy update.
RELATED PARTY TRANSACTIONS
Pursuant to sections 2:167 through 2:170 DCC, URW NV has adopted a related party transactions policy outlining the procedures to identify,
monitor, approve and disclose material transactions with related parties. The URW NV related party transactions policy applies from January 1,
2020 and is updated regularly to take into account changes in practice and legislation.
NO CONVICTIONS OR OFFENCES
As at December 31, 2023, to the best of the Company’s knowledge and based on their individual declaration, none of the SB Members or MB
Members has, over the past five years:
• been convicted of fraud;
• been associated as an executive with a bankruptcy, receivership or liquidation;
• been found guilty of an offence and/or publicly and officially sanctioned by a statutory or regulatory authority.
2.3 REMUNERATION REPORT
2.3.1 INTRODUCTION
In accordance with the Articles and Dutch law, URW NV's Annual General Meeting ("AGM") determines URW NV’s remuneration policies for the MB
Members and the SB Members (the "MB Remuneration Policy" and the "SB Remuneration Policy", respectively). URW NV's current MB Remuneration
Policy (effective since January 1, 2022) was adopted by the AGM on June 22, 2022 with 97,45% votes in favour. In 2023 there were no changes
introduced to URW NV’s current SB Remuneration Policy (effective as of January 1, 2021)
36
.
The MB Remuneration Policy is designed to:
36
The MB Remuneration Policy and the SB Remuneration Policy are available on our website: https://www.urw-nv.com/en/corporate-governance/related-documents.
35
• attract and retain MB Members with the leadership qualities, skills and experience needed to support and promote the growth and
sustainable success of URW NV and its business as well as the URW Group as a whole;
• motivate MB Members to achieve, and reward the achievement of, short and long-term performance targets (including with respect
to CSR) with the objective of increasing URW NV's equity value and contributing to URW NV's strategy for long-term value creation;
and
• align the interests of the MB Members to those of URW NV and the URW Group as a whole, and their respective businesses and
stakeholders.
The SB Remuneration Policy is intended to attract, motivate and retain high calibre individuals with an appropriate degree of expertise and
experience, which contributes to the strategy, long-term interests, sustainability, identity, mission and values of the Company and its business,
considering the interests of the URW Group.
URW NV believes that this approach and this philosophy benefit the realisation of URW NV's long-term objectives while managing URW NV's risk
profile.
The remuneration paid to the MB Members and SB Members in the 2023 financial year is consistent with the MB Remuneration Policy and the SB
Remuneration Policy, respectively. Therefore, the remuneration paid to our MB Members and SB Members in the 2023 financial year is consistent
with the intentions and design of our remuneration policy and thus contributes to the long-term performance of URW NV and the URW Group of
which it forms a part. Relevant scenario analyses have been considered in advance in determining the level and structure of the remuneration
of the MB Members in the 2023 financial year.
This remuneration report, which describes the remuneration of the MB Members and the SB Members for the financial year 2023, is subject to an
advisory vote at URW NV’s AGM in 2024. At the AGM held on June 27, 2023, 98,43% of votes were cast in favour of URW NV's remuneration report
2022. In light of this strong level of support and considering that no questions were raised at that General Meeting regarding remuneration, no
specifics needed to be addressed in this remuneration report.
The remuneration of the MB Members comprises a Fixed Income (“FI”), a Short-Term Incentive (“STI”) and a Long-Term Incentive (“LTI”) and
may furthermore include pension arrangements, severance pay and other benefits, as described below. The remuneration package of a MB
Member shall not include any welcome bonus, contractual non-compete indemnity, additional defined benefits pension scheme or intra-Group
board fees.
To support the Remuneration Policy’s objectives, the mix of remuneration includes pay-for-performance (STI and LTI). The chart below illustrates
the mix of Fixed Income vs pay-for-performance, assuming maximum STI pay-out and the theoretical maximum LTI grant size (IFRS) according to
the Management Board Remuneration Policy applicable in 2023.
2.3.2 REMUNERATION RATIO AND PERFORMANCE EVOLUTION
The Dutch Corporate Governance Code (“Code”) that applied during 2023 recommended the provision of a ratio comparing the remuneration of
the MB Members and that of a "representative reference group" determined by URW NV. We have chosen to compare as per December 31, 2023,
the full year average cash remuneration of the MB Members (i.e. excluding the value of equity incentive awards and other non-cash remuneration
components) to an equivalent of an average full-time employee
37
of URW NV (including its subsidiaries). We have used the aggregate cash
remuneration
38
from January 1, 2023 to December 31, 2023 as a reference amount
39
.
In setting the executive remuneration quantum, the SB and the GNRC use internal and external remuneration benchmarks but also take into
account the remuneration ratio. The remuneration ratio presented below helps ensuring that executive remuneration remains reasonable
compared to the company average and varies with company performance.
37
Average full-time employee includes full-time employees and full-time equivalent of part-time employees. Both fixed term and permanent employees are included.
It however excludes MB Members and interns.
38
The cash remuneration includes base salary and annual (cash) bonus.
39
The remuneration of employees who worked at URW NV and its affiliates for less than a year as of December 31, 2023 is annualised. The exchange rate used for
compensation paid in USD is the average rate over the period as published by the European Central Bank.
36
The table below sets out the history of this ratio since the financial year 2018, when URW NV was incorporated.
2.3.3 REMUNERATION OF THE MB MEMBERS FOR 2023 FINANCIAL YEAR
The MB Remuneration Policy that was approved by the AGM on June 27, 2023 was applied in 2023 with no deviation.
The remuneration of each MB Member as described in this section includes any such MB Member’s remuneration that was charged to any subsidiary
of URW NV and/or to any other company whose financial information is consolidated by URW NV.
40
The total remuneration paid or granted includes the FI, the STI due for the year (and paid during the following year), the LTI granted during the year and any other
additional benefits received during the year.
41
There is no longer any President US role since 2021.
42
As Mr. Lowe replaced Mr. Tritant as MB Member, they count for one unique person for the calculation of the average remuneration of the MB Members for the year
2020.
2023
2022
2021
2020
2019
Total remuneration
paid or granted
(including LTI)
40
Jean-Marie Tritant, President US
n/a
n/a
41
n/a
3, 4
€2,238,368 €2,742,740
Dominic Lowe, COO US €2,002,814 €2,287,377 €1,696,928 €647,518 n/a
Gerard Sieben, CFO €375,151 €358,704 €345,783 €307,953 €292,083
Pay ratio
(excluding LTI)
Average cash MB remuneration
€865,103 €839,429 €714,494
€645,310
42
€947,957
Company average cash
remuneration
€185,912 €164,387 €138,933 €135,710 €138,441
Multiple of the company average
cash remuneration
4.7 5.1 5.1 4.8 6.9
Company
performance
Net Operating Result (recurring) in
Mn €
€465.7 €481.2 €380.6 €310.4 €525.0
37
2.3.3.1 ELEMENTS OF REMUNERATION DUE OR GRANTED FOR THE 2023 FINANCIAL YEAR TO
MR DOMINIC LOWE, COO US
Elements of
Remuneration Amounts
Comments
Annual Fixed
Income – FI
(Paid in respect of
the 2023 year)
€693,225
Mr Lowe’s FI amounts to $750,000 (i.e. €693,225) per year.
Short-Term
Incentive – STI
(To be paid in 2024
in respect of the
2023 year)
€706,600
The target STI opportunity for 2023 was set at 100% of FI and the maximum at 150% of FI.
Performance measure
(scope is US unless specified)
Weight
Unit
Threshold
(37.5% of
target)
Target
Stretch
(125% of
target)
Achieved
Score
(% of
target)
Payout
Net Operating Result
20%
Mn €
431.60
493.26
517.92
465.70
72.06%
€99,917
Investments/Disposals
10%
Undisclosed*
111.89%
€77,572
Leasing renewals/re-lettings
5%
Mn €
134.0
162.4
173.7
162.8
100.84%
€34,956
Rent collection
5%
%
90%
95%
97%
97.5%
125%
€43,331
Effective rent Uplift
5%
Undisclosed*
125%
€43,331
Spot Vacancy
10%
%
13.7%
8.7%
6.7%
8.5%
102.5%
€71,062
Gross Admin expenses
5%
Undisclosed*
125%
€86,661
New revenues growth
10%
Undisclosed*
0%
€0
Female Exec. Pipeline
(Group)
5%
%
40.0%
54.3%
60.0%
56.5%
109.78%
€38,055
GHG emissions (Group)
5%
tCO
2
eq
46,243
44,518
43,828
29,365
125%
€43,331
Qualitative performance
20%
See details below
105%
€145,591
TO TAL
100%
101.9%
€706,600
* these objectives and actual achievements are commercially sensitive and therefore not disclosed.
The gross STI was determined by the SB on March 19, 2024, upon the recommendation of the GNRC, and
is before income tax and social security charges. The equivalent amount in USD is $764,459.
Among significant individual objectives achieved by Mr Lowe in 2023:
• Various process improvement and simplification projects conducted in the US, with significant cost
reduction achieved;
• Contributed significantly to Group deleveraging by signing 6 non-core asset disposals;
• Employee engagement increased from 58% in 2022 to 72% in 2023;
• Ongoing projects for developing renewable energy, EV charging, battery storage strategy and
business model.
The STI paid in 2023 in respect of 2022 was $785,344 (104.7% of target opportunity).
Long-Term
Incentive – LTI
Performance
Shares (PS) and
Performance
Stock Options (SO)
(Granted during
the 2023 year)
(Economic value at
the grant date
according to IFRS 2
requirements,
based on the
evaluation
conducted by
Willis Towers
Watson)
€558,128
The maximum LTI opportunity is 120% of FI (180% in exceptional circumstances).
The SB, upon the recommendation of the GNRC, granted a combination of PS and SO to Mr Lowe,
dated March 13, 2023, with the following characteristics:
Presence
condition
Performance
period
Performance
condition
Strike
price
Number of
units
Economic value
(IFRS)
PS
2 years of
continuous
presence
before the
date of
vesting or
exercise
3 years
80% financial
(35% Relative
TSR,
10% Absolute
TSR, 35% AREPS)
20% CSR
(10% GHG
emissions, 10%
executive
gender balance)
n/a 17,361
€453,740
$487,711*
SO
3 years
€58.98
(no
discount)
26,046
€104,388
$111,998*
TOTAL
€558,128
(i.e. $600,000 = 80% of FI*)
*Based on exchange rate published by the European Central Bank at grant date
Mr. Lowe has received SO and PS as COO US on May 21, 2021 and March 8, 2022 only. As such he has
no Performance Shares vested nor Stock Options exercisable yet in this capacity.
Pension
€18,301
Mr Lowe benefits from a defined contribution pension plan (401 K type) with a company matching done
under the same terms and conditions as the local employees.
Life and health
insurance
€26,570
Mr Lowe benefits from benefits applicable to all employees in his work country, including life and
health insurance and social security benefits.
Service agreement
Yes
The service agreement between URW NV and Mr Dominic Lowe is in force since June 29, 2021.
38
Elements of
Remuneration Amounts
Comments
TOTAL
€2,002,814
As a result to the above-mentioned figures, the fixed and variable remuneration components weigh 36.8% and 63.2% of total remuneration.
2.3.3.2 ELEMENTS OF REMUNERATION DUE OR GRANTED FOR THE 2023 FINANCIAL YEAR TO
MR GERARD SIEBEN, CHIEF FINANCIAL OFFICER (CFO)
Elements of
Remuneration Amounts
Comments
Annual Fixed Income –
FI (paid in respect of the
2023 year)
€185,012
The FI of the CFO may benefit from the usual annual salary indexation applicable in the Netherlands under
the same terms and conditions.
Short-Term Incentive –
STI (to be paid in 2024 in
respect of the 2023 year)
€50,341
The target STI opportunity is 25% of FI.
Performance measure
(URW Group)
Weight Unit
Threshold
(37.5% of
target)
Target
Stretch
(125% of
target)
Achieved
Score
(% of
target)
Payout
AREPS
35%
€
9.30
9.54
9.64
9.62
120.5%
€19,506
Net Debt
10%
Bn €
21.42
20.71
20.42
21.20
56.8%
€2,626
Liquidity
5%
×
1.0 ×
1.3 ×
1.5 ×
2.93 ×
125%
€2,891
Rent collection
5%
%
90%
95%
97%
97.4%
125%
€2,891
Gross Admin expenses
15%
Mn €
-557.4
-543.1
-537.4
-511.0
125%
€8,672
Gender parity improvement
5%
%
40.0%
54.3%
60.0%
56.5%
109.8%
€2,539
GHG emissions
5%
tCO2
46,243
44,518
43,828
29,365
125%
€2,891
Qualitative performance
20%
See details below
90%
€8,326
TO TAL
100%
108.8%
€50,341
The gross STI was determined by the SB on March 19, 2024, upon the recommendation of the GNRC, and is
before income tax and social security charges.
Among significant individual objectives achieved by Mr Sieben in 2023:
• Reporting: improved coordination between F&A teams in the US and the Netherlands leading to
improved reporting quality and timeliness;
• Deleveraging: successful conversion of an interest-bearing loan into a capital security safeguarding
URW NV’s Loan-to-Value;
• Corporate Governance: implemented the updated Dutch Corporate Governance Code for URW NV;
supported the transfer of URW Group listing from Euronext Amsterdam to Euronext Paris;
• ESG: further strengthening of community-oriented projects and actions of URW NV in the Netherlands.
The total STI paid in 2023, in respect of 2022, was €47,676 (103.1% of target STI).
Long-Term Incentive –
LTI
Performance Shares
(PS) and Performance
Stock Options (SO)
(Granted during the
2023 financial year)
(Economic value at the
grant date according to
IFRS 2 requirements,
based on the evaluation
conducted by Willis
Towers Watson)
€89,631
The maximum LTI opportunity is 70% of FI, 180% in exceptional circumstances.
The SB, upon the recommendation of the GNRC, granted a combination of PS and SO to Mr Sieben, dated
March 13, 2023, with the following characteristics:
Presence
condition
Performance
period
Performance
condition
Strike
price
Number of
units
Economic
value (IFRS)
PS
2 years of
continuous
presence before
the date of vesting
or exercise
3 years
80% financial
(35% Relative TSR,
10% Absolute TSR,
35% AREPS)
20% CSR
(10% GHG
emissions, 10%
executive gender
balance)
n/a 2,788 €72,860
SO 3 years
€58.98
(no
discount)
4,183 €16,765
TOTAL
€89,631 (50% of FI)
Mr Sieben has received SO and PS grant since 2019. As such, according to the performance of the LTI plan
2020 assessed at 40%, on March 21, 2023, he received 1,212 PS, and from that date 2,192 SO were
exercisable until March 21, 2028.
The SO and PS granted to Mr Sieben on March 13, 2023 will vest on March 13, 2026.
Pension
€24,552
Mr Sieben benefits from a defined contribution pension plan.
Benefits in Kind
€25,615
Mr Sieben benefits from a company car.
Service agreement
Yes
The service agreement between URW NV and Mr Gerard Sieben is in force since June 7, 2018.
TOTAL
€375,151
As a result to the above-mentioned figures, the fixed and variable remuneration components weigh 61.6% and 38.4% of total remuneration,
respectively.
39
40
2.4 REMUNERATION PAID TO THE SB MEMBERS FOR 2023
FINANCIAL YEAR
The remuneration policy of the SB Members is intended to attract, motivate and retain high calibre individuals with an appropriate degree of
expertise and experience, which contributes to the long-term interests, sustainability, identity, mission and value of the Company and its
business, considering the interests of the URW Group of which it forms part.
The SB remuneration policy is determined by the AGM, at the proposal of the SB, upon the recommendation of the GNRC.
SB Members receive an annual fee. In an increasingly competitive international environment, all SB Members also receive an out of country
indemnity for time spent on their duties as SB Members outside their country of residence.
While attendance of SB and relevant committee meetings is of course expected from all SB Members, we also award attendance fees as outlined
below to compensate the SB Members adequately and proportionately for their efforts.
In order to ensure a high standard of supervision and monitoring of the Company strategy as well as to avoid any potential conflict of interest,
the SB Members do not receive any remuneration related to Company performance.
The remuneration policy for the SB Members remains unchanged in 2023. The current SB remuneration policy was approved by the AGM on June
29, 2021.
2.4.1 REMUNERATION PAID TO THE SB MEMBERS
In 2023 remuneration of the SB members amounted to €266,000. Mr. Jean-Marie Tritant, Mr. Fabrice Mouchel and Ms. Aline Taireh did not receive
any remuneration for their SB membership. URW NV has not awarded any options or shares to members of the SB as remuneration for their
services as SB members. No loans or guarantees were granted to members of the SB.
EVOLUTION OF REMUNERATION OF THE SB MEMBERS
SB Members
2023
2022
2021
2020
2019
Mr. Jean-Marie Tritant
(2)
€0
€0
€0
NA
NA
Mr. Fabrice Mouchel
€0
€0
€0
NA
NA
Mr. Jean-Louis Laurens
€136,000
€138,000
€130,000
€135,500
€135,000
Mr. Alec Pelmore
(3)
€0
€0
€0
€122,000
€120,000
Mrs. Catherine Pourre
€130,000
€122,500
€109,417
NA
NA
Ms. Aline Taireh
(4)
€0
€0
€0
€0
€0
TOTAL
€266,000
€260,500
€239,417
€257,500
€255,000
(1) The 2018 remuneration was applied pro rata temporis.
(2) Mr. Jean-Marie Tritant has received in 2021 a tax equalisation payment related to his former capacity as MB member in 2020. The amount is €469,644. The Remuneration received
as MB member in 2018, 2019 and 2020 is disclosed in the corresponding Annual Report.
(3) On December 17, 2020, the Supervisory Board took note of the resignation of Mr. Alec Pelmore with effect January 4, 2021.
(4) Ms. Aline Taireh did not receive any compensation for her SB membership.
2.4.2 NUMBER OF STAPLED SHARES, SO AND PS HELD BY MB MEMBERS AND SB MEMBERS AS AT
DECEMBER 31,2023
MB and SB Members
Stapled Shares
Owned
Non-exercised
SO
PS subject to vesting
period
M
r. Dominic Lowe
1,335 88,767 60,611
Mr. Gerard Sieben
897 19,354
8,321
Mr. Jean
-Marie Tritant 51,764* 258,159 109,793
Mr. Fabrice Mouchel
31,811** 188,470 82,345
Mr.
Jean-Louis Laurens
363 0 0
Mrs. Catherine Pourre
105,446 0 0
Ms. Aline Taireh
1,345*** 32,670 14,733
* Excluding 5,033 Stapled Shares held via the URW SE Company Saving Plan.
** Excluding 8,885 Stapled Shares held via the URW SE Company Saving Plan.
*** Including 305 Stapled Shares held through CDI’s.
41
FINANCIAL STATEMENTS AS
AT DECEMBER 31, 2023
42
On March 19, 2024, the Supervisory Board approved the consolidated financial statements of Unibail-Rodamco-Westfield N.V. for the year ended
December 31, 2023, and authorised their publication. These consolidated financial statements will be submitted to the approval of the Annual
General Meeting expected to be held on June 12, 2024.
3.1 CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements are presented in millions of euros, rounded to the nearest hundred thousand and, as a result, slight
differences between rounded figures may exist throughout chapter 3.
3.1.1 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| 2023 | 2022 | ||
(€Mn) | Notes | ||
Gross rental income | 5.3 | ||
Service charge income | |||
Service charge expenses | ( | ( | |
Property operating expenses | ( | ( | |
Operating expenses and net service charges | ( | ( | |
Net rental income | |||
Net property services and other activities income | |||
Share of result of companies accounted for using the equity method | 7.2 | ( | ( |
Corporate expenses | ( | ( | |
Depreciation of tangible assets | 6.2.2 | ( | ( |
Administrative expenses | ( | ( | |
Acquisition and related costs | 5.2.4 | ( | ( |
Result on disposal of investment properties and loss of control | 2.1.1/2.2.1 | ( | |
Valuation gains on assets | |||
Valuation losses on assets | ( | ( | |
Valuation movements on assets | 6.4 | ( | ( |
NET OPERATING RESULT | ( | ( | |
Financial income | |||
Financial expenses | ( | ( | |
Net financing costs | 8.2.1 | ( | ( |
Fair value adjustments of derivatives, debt and currency effect | 8.2.2 | ( | |
RESULT BEFORE TAX | ( | ( | |
Income tax benefit/(expenses) | 9.2 | ||
NET RESULT FOR THE PERIOD | ( | ( | |
Net result for the period attributable to: | ( | ( | |
Owners of Unibail-Rodamco-Westfield N.V. shares | ( | ( | |
Non-controlling interests | |||
NET RESULT FOR THE PERIOD | ( | ( |
43
| 2023 | 2022 | ||
Average numbers of shares (undiluted) | 14.2 | ||
Net result of the period (Owners of Unibail-Rodamco-Westfield N.V.) | ( | ( | |
Net result for the period per share (Owners of Unibail-Rodamco- Westfield N.V.) (€) | ( | ( | |
Average numbers of shares (diluted) | 14.2 | ||
Net result of the period (Owners of Unibail-Rodamco-Westfield N.V.) | ( | ( | |
Diluted net result per share (Owners of Unibail-Rodamco-Westfield | ( | ( | |
N.V.) (€) (1) | 2023 | 2022 | |
(€Mn) | |||
NET RESULT FOR THE PERIOD | ( | ( | |
Foreign currency differences on translation of financial statements of subsidiaries | |||
and net investments in these subsidiaries (2) | ( | ||
Other comprehensive income that may be subsequently recycled to profit | |||
and loss | ( | ||
OTHER COMPREHENSIVE INCOME | ( | ||
TOTAL COMPREHENSIVE INCOME | ( | ( | |
Total Comprehensive Income for the period attributable to: | |||
Owners of Unibail-Rodamco-Westfield N.V. shares | ( | ( | |
External non-controlling interests | ( | ( | |
TOTAL COMPREHENSIVE INCOME | ( | ( |
(1) In case of a negative net result for the period, the diluted net result per share is equal to the net result for the period per share. For 2023 and 2022 the EPS are
antidilutive.
(2) The amount is presented net of related tax effects.
44
3.1.2 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| December 31, 2023 | December 31, 2022 | ||
(€Mn) | Notes | ||
Non-current assets | |||
Investment properties | 6.1 | ||
Investment properties at fair value | |||
Investment properties at cost | |||
Shares and investments in companies accounted for using the equity | |||
method | 7.2 | ||
Tangible assets | 6.2 | ||
Intangible assets | 6.3 | ||
Financial assets | 8.3.1 | ||
Deferred tax assets | 9.3 | ||
Derivatives at fair value | 8.4 | ||
Current assets | |||
Properties or shares held for sale (1) | |||
Inventories | |||
Trade receivables from activity | 8.3.1 | ||
Tax receivables | |||
Other receivables | 8.3.1 | ||
Cash and cash equivalents | 8.3.6 | ||
Total assets | |||
SHAREHOLDERS' EQUITY (OWNERS OF UNIBAIL-RODAMCO- WESTFIELD N.V. SHARES) | |||
Share capital | 14.2 | ||
Additional paid-in capital | 14.3 | ||
Consolidated reserves | 3.1.4 | ( | ( |
Foreign currency translation reserves | |||
Consolidated result | 3.1.1 | ( | ( |
Capital securities | 14.6 | ||
Equity attributable to the owners of Unibail-Rodamco-Westfield | |||
N.V. | |||
Non-controlling interests | 15.4 | ( | ( |
Total shareholders' equity | |||
NON-CURRENT LIABILITIES | |||
Long-term commitment to non-controlling interests | 8.3.7 | ||
Long-term bonds and borrowings | 8.3.3 | ||
Long-term lease liabilities | 8.3.3 | ||
Derivatives at fair value | 8.4 | ||
Deferred tax liabilities | 9.3 | ||
Non-current provisions | 10 | ||
Guarantee deposits | |||
Amounts due on investments | 12 | ||
Other non-current liabilities | |||
Current liabilities | |||
Liabilities directly associated with properties or shares classified as held for sale | |||
Current commitment to non-controlling interests | 8.3.7 | ||
Amounts due to suppliers and other creditors | |||
Amounts due to suppliers | |||
Amounts due on investments | 12 | ||
Sundry creditors | |||
Other current liabilities | 11 | ||
Current borrowings and amounts due to credit institutions | 8.3.3 | ||
Current lease liabilities | 8.3.3 | ||
Current provisions | 10 | ||
Total liabilities and equity |
(1) In H2-2023, URW signed a Sale, Purchase and Escrow Agreement with a $30 Mn non-refundable cash deposit for the disposal of Westfield Oakridge.
45
3.1.3 CONSOLIDATED STATEMENT OF CASH FLOWS
(€Mn) | Notes | 2023 | 2022 |
OPERATING ACTIVITIES | |||
Net result | ( | ( | |
Depreciation & provisions (1) | ( | ( | |
Changes in value of property assets | 6.4 | ||
Changes in fair value of derivatives, debt and currency effect | 8.2.2 | ( | |
Result on disposal of investment properties and loss of control (2) | ( | ||
Share of the result of companies accounted for using the equity method | |||
Net financing costs | 8.2.1 | ||
(Income) tax benefit/expenses | 9.2 | ( | ( |
Dividend received from companies accounted for using the equity method or non-consolidated (4) | |||
Income tax (paid) received | ( | ( | |
Change in working capital requirement | ( | ||
Total cash flow from operating activities | |||
INVESTMENT ACTIVITIES | |||
Property activities | ( | ||
Amounts paid for works and acquisition of property assets | 6.5 | ( | ( |
Repayment of property financing | |||
Increase of property financing (3) | ( | ( | |
Disposal of investment properties and loss of control | 2.1.1/2.2.1 | ||
Financial activities | ( | ( | |
Acquisition/issuing of financial assets | ( | ( | |
Repayment of financial assets | |||
Total cash flow from investment activities | ( | ( | |
FINANCING ACTIVITIES | |||
Increase in capital | |||
New borrowings and financial liabilities | 8.3.3 | ||
Repayment of borrowings and financial liabilities | 8.3.3 | ( | ( |
Cash flows from derivatives | |||
Interest paid (5) | ( | ( | |
Other financing activities | |||
Total cash flow from financing activities | ( | ||
Change in cash and cash equivalents during the period | ( | ||
Net cash and cash equivalents at the beginning of the year | |||
Effect of exchange rate fluctuations on cash held | ( | ||
Net Cash and cash equivalents at period-end | 8.3.6 |
(1) Includes straight lining of key money and lease incentives.
(2) Includes capital gains/losses on property sales, disposals of held for sale investment properties and disposals of operating assets.
(3) Capital contributions from/to Joint Ventures.
(4) In 2023, includes €80.5 Mn (2022: €343.2 Mn) of distributions made by US companies accounted for using the equity method, following the disposal of their assets.
(5) This amount included an amount that relates to interest received.
46
3.1.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity | |||||||||
attributable | |||||||||
| Foreign | to the | ||||||||
| Additional | Consoli- | Consoli- | currency | owners of | Non- | Total | |||
| Share | paid-in | dated | dated | translation | Capital | URW NV | controlling | Shareholders' | |
(€Mn) | capital | capital | reserves | net result | reserve (1) | securities | shares | interests | equity |
EQUITY AS AT DECEMBER 31, 2021 | ( | ( | ( | ||||||
Net result of the period | ( | ( | ( | ( | |||||
Other comprehensive income | ( | ||||||||
Net comprehensive income | ( | ( | ( | ( | |||||
Earnings appropriation | ( | ||||||||
Increase in capital | |||||||||
Restatement of hybrid securities | ( | ( | ( | ||||||
Amendment related party liabilities (2) | |||||||||
EQUITY AS AT DECEMBER 31, 2022 | ( | ( | ( | ||||||
Net result of the period | ( | ( | ( | ( | |||||
Other comprehensive income | ( | ( | ( | ||||||
Net comprehensive income | ( | ( | ( | ( | ( | ||||
Earnings appropriation | ( | ||||||||
Increase in capital | ( | ( | ( | ||||||
Restatement of hybrid securities | ( | ( | ( | ||||||
Amendment related party liabilities (2) | |||||||||
Change in scope of consolidation and other | |||||||||
EQUITY AS AT DECEMBER 31, 2023 | ( | ( | ( |
(1) The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.
(2) Reference is made to Note 2.1.3. and 2.2.2.
3.2 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
47
48
49
The converted part qualifies as equity with the exception of the amount due on this instrument, which is initially measured at fair value at
balance sheet date (€0.1 Mn at December 31, 2022) and subsequently at amortised cost using the effective interest method. The amendment
fee paid to URW SE of €5.4 Mn and the remaining amortised upfront fee of €0.3 Mn are recorded in 2022 under financial expenses.
50
3.3 CLIMATE CHANGE AND RISKS
Climate change mitigation and adaptation are part of the priorities of the URW Group Sustainability strategy, and form an essential component
of the Sustainability risks analysis. URW Group analyses the physical and transitional risks associated with climate change. These risks are in turn
integrated into the Enterprise Risk Management framework.
In October 2023, URW Group announced a comprehensive evolution of the Better Places roadmap, setting ambitious SBTi-approved (The Science
Based Targets Initiative) net-zero targets in terms of carbon emissions reduction and reinforcing its environmental performance objectives, with
the aim to develop and operate places that provide sustainable experiences and contribute to thriving communities.
NOTE 4 ● SCOPE OF CONSOLIDATION
51
52
53
54
5.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME BY SEGMENT
2023 | 2022 | ||
(€Mn) | Result | Result | |
Gross rental income (1) | 340.8 | 379.3 | |
Operating expenses & net service charges | (122.6) | (140.4) | |
Net rental income | 218.2 | 238.9 | |
| United States | Share of result of companies accounted for using the equity method | (272.2) | (211.9) |
Gains/losses on sale of properties | 28.0 | 0.1 | |
Valuation movements on assets | (165.5) | (395.6) | |
Result Shopping Centres United States | (191.6) | (368.5) | |
Gross rental income (1) | 2.0 | 2.2 | |
Operating expenses & net service charges | (0.4) | (0.3) | |
| Other | Net rental income | 1.6 | 1.9 |
Gains/losses on sales of properties | 0.1 | (3.1) | |
Valuation movements on assets | 0.8 | (0.3) | |
Result Shopping Centres Other | 2.6 | (1.5) | |
TOTAL RESULT SHOPPING CENTRES | (189.0) | (370.0) | |
Gross rental income (1) | 3.7 | 5.3 | |
Operating expenses & net service charges | (2.3) | (2.9) | |
Net rental income | 1.4 | 2.4 | |
| United States | Share of result of companies accounted for using the equity method | (3.5) | (11.6) |
Valuation movements on assets | (19.8) | (2.2) | |
Result Offices United States | (21.8) | (11.3) | |
TOTAL RESULT OFFICES | (21.8) | (11.3) | |
Other property services net income | 0.2 | 0.5 | |
Corporate expenses | (18.3) | (20.7) | |
Acquisition and related costs | (5.1) | (5.9) | |
NET OPERATING RESULT | (234.1) | (407.4) | |
Financing result | (493.4) | 162.0 | |
RESULT BEFORE TAX | (727.5) | (245.4) | |
Tax income (expense) | 35.1 | 11.7 | |
NET RESULT FOR THE PERIOD | (692.4) | (233.7) | |
External non-controlling interests | (82.8) | (81.5) | |
NET RESULT FOR THE PERIOD ATTRIBUTABLE TO THE OWNERS OF URW N.V. SHARES | (609.6) | (152.2) |
(1) There is no tenant which contracts for more than 10% of the Gross Rental Income and there are no material revenues from transactions with other operating segments of the same entity.
These segmentations are also applied in note 6.1.2, Investment properties at fair value.
NOTE 6 ● INVESTMENT PROPERTIES, TANGIBLE ASSETS, INTANGIBLE ASSETS AND
GOODWILL
55
(€Mn) | December 31, 2023 | December 31, 2022 | |
Shopping Centres | 4,185.5 | 4,841.1 | |
United States | 4,168.7 | 4,824.7 | |
- | Flagships centres | 4,168.7 | 4,613.8 |
- | Regionals centres | - | 210.9 |
The Netherlands | 16.8 | 16.4 | |
Offices | 31.9 | 52.3 | |
United States | 31.9 | 52.3 | |
TOTAL | 4,217.4 | 4,893.5 |
Total investment | ||||
(€Mn) | Shopping Centres | Offices | Properties held for sale | properties |
December 31, 2021 | 4,978.6 | 50.4 | - | 5,029.1 |
Acquisition | 22.3 | - | - | 22.3 |
Disposals/exits from the scope of consolidation | (190.1) | - | - | (190.1) |
Reclassification and transfer of category | 10.8 | - | - | 10.8 |
Capitalised expenses | 24.4 | 0.9 | - | 25.4 |
Valuation movements | (317.1) | (2.2) | - | (319.2) |
Currency translation | 312.1 | 3.1 | - | 315.3 |
December 31, 2022 | 4,841.1 | 52.3 | - | 4,893.5 |
Disposals/exits from the scope of consolidation | (347.0) | - | - | (347.0) |
Reclassification and transfer of category | (5.2) | - | - | (5.2) |
Capitalised expenses | 65.5 | 0.7 | - | 66.1 |
Valuation movements | (208.8) | (19.8) | - | (228.6) |
Currency translation | (160.0) | (1.4) | - | (161.4) |
December 31, 2023 | 4,185.5 | 31.9 | - | 4,217.4 |
| Net initial | Rent in € | Discount | CAGR of | |||
Shopping Centres – December 31, 2023 | yield | per sqm | Rate | Exit yield (3) | NRI | |
Max | 12.2% | 1,438 | 14.0% | 12.0% | 9.5% | |
| US | Min | 3.2% | 345 | 6.8% | 5.0% | 1.9% |
Weighted average | 4.9% | 767 | 7.4% | 5.5% | 4.8% | |
| Net initial | Rent in € | Discount | CAGR of | |||
Shopping Centres – December 31, 2022 | yield | per sqm | Rate | Exit yield (3) | NRI | |
Max | 9.6% | 1,438 | 10.3% | 9.0% | 11.4% | |
| US | Min | 2.9% | 321 | 6.5% | 4.5% | 0.6% |
Weighted average | 4.6% | 700 | 7.1% | 5.2% | 4.6% |
| Net initial | Rent in € | Discount | CAGR of | |||
Shopping Centres – December 31, 2023 | yield | per sqm | Rate | Exit yield (3) | NRI | |
Max | 6.1% | 1,438 | 7.8% | 6.0% | 9.5% | |
| US Flagships incl. CBD | Min | 3.2% | 476 | 6.8% | 5.0% | 2.5% |
Weighted average | 4.6% | 842 | 7.2% | 5.3% | 5.0% | |
Max | 12.2% | 593 | 14.0% | 12.0% | 4.5% | |
| US Regionals | Min | 7.8% | 345 | 10.0% | 8.3% | 1.9% |
Weighted average | 9.4% | 421 | 10.9% | 9.2% | 2.9% |
| Net initial | Rent in € | Discount | CAGR of | |||
Shopping Centres – December 31, 2022 | yield | per sqm | Rate | Exit yield (3) | NRI | |
Max | 7.5% | 1,438 | 9.0% | 7.3% | 11.4% | |
| US Flagships incl. CBD | Min | 2.9% | 399 | 6.5% | 4.5% | 1.8% |
Weighted average | 4.2% | 820 | 6.8% | 4.9% | 5.0% | |
Max | 9.6% | 607 | 10.3% | 9.0% | 6.3% | |
| US Regionals | Min | 6.4% | 321 | 8.5% | 7.0% | 0.6% |
Weighted average | 8.6% | 411 | 9.8% | 8.0% | 2.3% |
56
57
6.1.3 Investment properties under construction at cost
Total investment | |||
(€Mn) | Gross value | Impairment | properties at cost |
December 31, 2021 | 20.2 | - | 20.2 |
Reclassification and transfer of category | (10.8) | - | (10.8) |
Disposals/exits from the scope of consolidation | (1.1) | - | (1.1) |
Capitalised expenses | 3.8 | - | 3.8 |
Written off | (4.4) | - | (4.4) |
Currency translation | 1.4 | - | 1.4 |
December 31, 2022 | 9.0 | - | 9.0 |
Disposals/exits from the scope of consolidation | (8.1) | - | (8.1) |
Capitalised expenses | 1.7 | - | 1.7 |
Currency translation | (0.3) | - | (0.3) |
December 31, 2023 | 2.3 | - | 2.3 |
Item: | Depreciation period: |
Office equipment | 2 – 5 years |
Furniture | 3 – 5 years |
58
| Cost | Furniture and | Right of use | |
(€Mn) | equipment | Total tangible assets | |
December 31, 2021 | 59.1 | 32.6 | 91.6 |
Acquisitions | 0.3 | 1.3 | 1.6 |
Reclassification and other movement | (8.4) | 4.5 | (3.9) |
Disposals/exists from the scope of consolidation | - | (23.4) | (23.4) |
Currency translation | 3.8 | 2.2 | 6.0 |
December 31, 2022 | 54.8 | 17.3 | 71.9 |
Acquisitions | 0.2 | 0.5 | 0.7 |
Reclassification and other movement | - | (3.7) | (3.7) |
Currency translation | (1.9) | (0.5) | (2.4) |
December 31, 2023 | 53.1 | 13.6 | 66.7 |
| Accumulated depreciation | Furniture and | Right of use | |
(€Mn) | equipment | Total tangible assets | |
December 31, 2021 | (54.8) | (10.5) | (65.3) |
Depreciation | (1.4) | (3.5) | (4.8) |
Disposals/exists from the scope of consolidation | - | 9.0 | 9.0 |
Reclassification and other movement | 6.5 | - | 6.5 |
Currency translation | (3.5) | (0.7) | (4.1) |
December 31, 2022 | (53.2) | (5.7) | (58.9) |
Depreciation | (3.4) | (3.1) | (6.5) |
Reclassification and other movement | 2.5 | 3.7 | 6.2 |
Currency translation | 1.9 | 0.2 | 2.1 |
December 31, 2023 | (52.2) | (4.9) | (57.1) |
| Net book value | Furniture and | Right of use | |
(€Mn) | equipment | Total tangible assets | |
December 31, 2022 | 1.6 | 11.6 | 13.2 |
December 31, 2023 | 0.9 | 8.7 | 9.6 |
| Cost | |||
(€Mn) | Software | Trademark | Total intangible assets |
December 31, 2021 | 97.0 | 317.4 | 414.4 |
Reclassification | 14.3 | - | 14.3 |
Currency translation | 5.8 | 19.6 | 25.5 |
December 31, 2022 | 117.2 | 337.1 | 454.2 |
Acquisitions | 5.0 | - | 5.0 |
Disposal | (25.7) | - | (25.7) |
Currency translation | (3.6) | (11.7) | (15.3) |
December 31, 2023 | 92.8 | 325.3 | 418.1 |
| Accumulated amortisation and impairment | |||
(€Mn) | Software | Trademark | Total intangible assets |
December 31, 2021 | (96.6) | (54.4) | (151.0) |
Amortisation | (7.5) | - | (7.5) |
Impairment | - | (74.4) | (74.4) |
Reclassification | (1.8) | - | (1.8) |
Currency translation | (5.9) | (2.4) | (8.3) |
December 31, 2022 | (111.7) | (131.3) | (243.0) |
Amortisation | (5.3) | - | (5.3) |
Reversal of impairment | - | 44.2 | 44.2 |
Disposal | 25.6 | - | 25.6 |
Reclassification | 1.8 | - | 1.8 |
Currency translation | 3.4 | 3.6 | 7.0 |
December 31, 2023 | (86.3) | (83.4) | (169.7) |
| Net book value | |||
(€Mn) | Software | Trademark Total intangible assets | |
December 31, 2022 | 5.4 | 205.8 | 211.2 |
December 31, 2023 | 6.5 | 241.9 | 248.4 |
(€Mn) | 2023 | 2022 |
Investment properties at fair value | (228.6) | (319.2) |
Investment properties at cost | - | (4.4) |
Reversal/Impairment of intangible assets | 44.2 | (74.4) |
Net result | (184.4) | (398.1) |
59
60
6.5 AMOUNTS PAID FOR WORKS AND ACQUISITION/DISPOSAL OF PROPERTY ASSETS
(CONSOLIDATED STATEMENT OF CASH FLOWS)
In 2023, amounts paid for works and acquisition of property assets amount to €64.1 Mn (December 31, 2022: €61.4 Mn). They comprise acquisitions
of assets, transaction capitalised costs, works and capitalised expenses and are adjusted for the changes on amounts due on investments of the
period.
December 31, | December 31, | December 31, | December 31, | |
| (€Mn) | 2023 | 2023 | 2022 | 2022 |
JVs at 100% | URW NV’s share | JVs at 100% | URW NV’s share | |
Investment properties | 9,331.7 | 4,798.2 | 11,381.2 | 5,848.3 |
Other non-current assets | 5.5 | 2.8 | 44.5 | 24.2 |
Current assets | 197.6 | 102.5 | 335.1 | 170.6 |
Cash and cash equivalents | 55.9 | 28.4 | 62.4 | 32.4 |
Total assets 3 | 9,590.8 | 4,931.8 | 11,823.2 | 6,075.5 |
Long-term External borrowings | 886.4 | 458.0 | 1,693.1 | 883.4 |
Short-term External borrowings | 313.8 | 155.4 | 364.8 | 163.0 |
Other non-current liabilities | 20.0 | 10.3 | 33.9 | 18.0 |
Current liabilities | 192.8 | 98.4 | 220.4 | 109.4 |
Total liabilities 3 | 1,413.0 | 722.0 | 2,312.2 | 1,173.8 |
TOTAL NET ASSETS | 8,177.8 | 4,209.8 | 9,511.0 | 4,901.7 |
Value of joint venture reclassified as “Assets held for sale” 4 | - | (131.5) | - | - |
NET ASSETS | 8,177.8 | 4,078.3 | 9,511.0 | 4,901.7 |
| (€Mn) | 2023 | 2023 | 2022 | 2022 |
| JVs at 100% | URW NV’s share | JVs at 100% | URW NV’s share | |
Net rental income | 518.3 | 267.2 | 615.6 | 316.9 |
Change in fair value of investment properties 3 | (883.2) | (467.4) | (811.2) | (443.0) |
Financial result | (64.6) | (32.4) | (76.6) | (37.8) |
Net result 1 2 3 | (497.6) | (275.7) | (392.3) | (223.5) |
61
| Economic interest | Economic interest | ||
| Name of the investments⁽¹⁾ | Type of equity | December 31, 2023 | December 31, 2022 |
Annapolis (2) | Partnership units | 55.0% | 55.0% |
Culver City (2) | Partnership units | 55.0% | 55.0% |
Fashion Square | Partnership units | 50.0% | 50.0% |
Garden State Plaza | Partnership units | 50.0% | 50.0% |
Mission Valley (3) | Partnership units | - | 41.7% |
Montgomery | Partnership units | 50.0% | 50.0% |
MV Macy’s Box/Parcel (3) | Partnership units | - | 41.7% |
North County (4) | Partnership units | - | 55.0% |
Oakridge (2) | Partnership units | 55.0% | 55.0% |
Plaza Bonita (2) | Partnership units | 55.0% | 55.0% |
San Francisco Emporium (5) | Partnership units | - | 50.0% |
Southcenter (2) | Partnership units | 55.0% | 55.0% |
Topanga (2) | Partnership units | 55.0% | 55.0% |
UTC | Partnership units | 50.0% | 50.0% |
Valencia Town Center (6) | Partnership units | - | 50.0% |
Valley Fair | Partnership units | 50.0% | 50.0% |
Wheaton (2) | Partnership units | 52.6% | 52.6% |
UTC/VF Services | Membership units | 50.0% | 50.0% |
Emporium Offices (5) | Partnership units | - | 50.0% |
Wheaton North Office (2) | Partnership units | 52.6% | 52.6% |
Wheaton South Office (2) | Partnership units | 52.6% | 52.6% |
Montgomery Condo | Partnership units | 50.0% | 50.0% |
Blum (7) | Associates | - | 20.0% |
(€Mn) | December 31, 2023 | December 31, 2022 |
Current account in debit/(credit) | (8.4) | (13.6) |
62
63
NOTE 8 ● FINANCING AND FINANCIAL INSTRUMENTS
64
65
8.2 FINANCING RESULT
(€Mn) | 2023 | 2022 |
Other financial interest (1) | 26.2 | 7.1 |
Amount due from derivatives | 42.7 | 45.2 |
Subtotal financial income | 68.9 | 52.3 |
Interest on bonds and EMTNs | (143.5) | (147.4) |
Interest and expenses on borrowings | (269.6) | (152.8) |
Interest expense on lease liabilities | (2.6) | (3.2) |
Interest on preference shares | (37.0) | (37.1) |
Other financial interest (2) | (24.4) | (15.7) |
Amount due on derivatives | (40.6) | (58.5) |
Financial expenses before capitalisation of financial expenses | (517.7) | (414.7) |
Capitalised financial expenses | 0.4 | 0.5 |
Subtotal net financial expenses | (517.3) | (414.2) |
TOTAL NET FINANCING COSTS | (448.3) | (361.9) |
(€Mn) | 2023 | 2022 | |
Amortisation of debt | (4.7) | (9.2) | |
Currency result | (1.6) | (2.5) | |
Fair value of derivatives | 14.7 | 465.3 | |
Fair value preference shares | 9.8 | 64.2 | |
Default on interest payment | (1.7) | - | |
ECL on financial guarantee contracts | - | 13.5 | |
Fair value of preferred interest | (61.7) | (1) | (7.5) |
TOTAL FINANCIAL RESULT | (45.2) | 523.8 |
66
8.3 FINANCIAL ASSETS AND LIABILITIES
(€Mn) | December 31, 2023 | December 31, 2022 |
Financial assets at fair value through profit and loss | 82.7 | 256.8 |
Preferred interest Starwood and Rouse | 49.9 | 114.2 |
Derivatives at fair value | 32.8 | 142.6 |
Financial assets at amortised cost | 1,072.4 | 236.8 |
Other financial assets | 5.0 | 3.9 |
Trade receivables from activity | 73.8 | 86.3 |
Other receivables (1) | 955.5 | 70.6 |
Cash and cash equivalents | 38.1 | 76.0 |
FINANCIAL ASSETS | 1,155.0 | 493.6 |
Total current | 1,067.4 | 232.9 |
Total non-current | 87.7 | 260.7 |
67
Current | Non-current | Total | Total | ||
Outstanding duration to maturity (€Mn) | Less than 1 year | 1 year to 5 years | More than 5 years | December 31, 2023 | December 31, 2022 |
Bonds and notes | 927.2 | 1,131.9 | 1,587.4 | 3,646.5 | 3,774.2 |
Principal debt (1) | 905.0 | 1,131.2 | 1,583.7 | 3,619.9 | 3,750.2 |
Accrued interest | 37.2 | - | - | 37.2 | 38.5 |
Issuance costs | (14.0) | - | - | (14.0) | (16.7) |
Amortisation of debt | (1.0) | 0.7 | 3.7 | 3.4 | 2.2 |
Bank borrowings | (6.3) | 1,086.0 | - | 1,079.7 | 105.0 |
Principal debt (1) | - | 1,086.0 | - | 1,086.0 | 113.4 |
Accrued interest | 6.4 | - | - | 6.4 | 0.3 |
Borrowings issue fees | (12.7) | - | - | (12.7) | (5.4) |
Amortisation of debt | - | - | - | - | (3.3) |
Other financial liabilities | 70.4 | 3,441.7 | 56.5 | 3,568.6 | 4,646.4 |
Borrowing with URW SE (2) | - | 3,441.7 | 56.5 | 3,498.2 | 4,623.9 |
Accrued interests on borrowings with URW SE (2) | 70.4 | - | - | 70.4 | 23.1 |
Charges and premiums on issues of borrowings with URW SE (2) | - | - | - | - | (0.6) |
Lease liabilities | 1.2 | 4.9 | - | 6.1 | 43.6 |
TOTAL | 992.5 | 5,664.5 | 1,643.9 | 8,300.9 | 8,569.2 |
Cash flows (1) | Non-cash flows | |||||||||
| December | Variation of accrued | Scope | Currency Amortisation | |||||||
| 31, 2022 | Increase (2) | Decrease | interests (3) | movements | translation | impact | Others | December 31, 2023 | ||
Bonds and notes | 3,774.2 | - | - | - | - | (131.3) | 1.5 | 2.2 | 3,646.5 | |
Bank borrowings | 105.0 | 1,095.0 | - | 7.3 | (113.0) | (27.4) | 3.2 | 9.7 | 1,079.7 | |
Other financial liabilities (6) | 4,646.4 | 518.4 | (1,021.8) | 48.0 | - | (122.6) | - | (500.0) | (5) | 3,568.6 |
Lease liabilities | 43.6 | 0.4 | (4.5) | - | (31.9) | (1.5) | - | - | 6.1 | |
TOTAL | 8,569.2 | 1,613.8 | (1,026.3) | 55.3 | (144.9) | (282.8) | 4.7 | (488.1) | 8,300.9 |
68
The 2022 variation of financial debt by flows breaks down as follows:
Cash flows (1) | Non-cash flows | ||||||||||
| December | Variation of accrued | Scope | Currency Amortisation | ||||||||
31, 2021 | Increase (2) | Decrease | interests (3) | movements | translation | impact | Others | December 31, 2022 | |||
Bonds and notes | 3,545.4 | - | - | - | - | 219.3 | 2.0 | 7.5 | 3,774.2 | ||
Bank borrowings | 478.7 | - | (264.8) | (1.6) | (143.4) | (4) | 35.0 | 7.2 | (6.1) | 105.0 | |
Other financial liabilities | 4,710.7 | 324.8 | (392.8) | 17.7 | - | 232.7 | - | (246.7) | (5) | 4,646.4 | |
Lease liabilities | 57.1 | 0.8 | (22.6) | - | - | 3.8 | - | 4.5 | 43.6 | ||
TOTAL | 8,791.9 | 325.6 | (680.2) | 16.1 | (143.4) | 490.8 | 9.2 | (240.8) | 8,569.2 |
(1) The cash flows differ from those in the Consolidated statement of cash flows mainly due to the variation of guarantee deposits received.
(2) Net of bonds and EMTNs issuance costs and bank borrowings issue fees.
(3) The variation of accrued interest is included in lines Financial income/Financial expenses of the Consolidated statement of cash flows.
(4) The variation of scope movements includes the deconsolidation of Westfield Trumbull, reference is made to note 2.1.1.
(5) The variation of Others includes conversion of the €250 Mn loan with URW SE to equity, reference is made to note 2.1.2.
(6) Other financial liabilities consist of borrowings and accrued interest on borrowings with URW SE.
Current | ||||
1 month to 3 | More than 3 | Total | ||
(€Mn) | Less than 1 month | months | months | December 31, 2023 |
Bonds and notes | 23.2 | - | 904.0 | 927.2 |
Bank borrowings | (6.3) | - | - | (6.3) |
Borrowing with URW SE | 70.4 | - | - | 70.4 |
Financial leases | - | - | 1.2 | 1.2 |
TOTAL | 87.3 | - | 905.2 | 992.5 |
Amount as at | Amount as at December 31, | ||||
| December 31, 2023 | 2022 | ||||
Issue date | Rate | Currency | (€Mn) | (€Mn) | Maturity |
September 2014 | Fixed rate 3.75% | USD | 905.0 | 937.6 | September 2024 |
September 2014 | Fixed rate 4.75% | USD | 452.5 | 468.8 | September 2044 |
September 2018 | Fixed rate 4.125% | USD | 452.5 | 468.8 | September 2028 |
September 2018 | Fixed rate 4.625% | USD | 452.5 | 468.8 | September 2048 |
June 2019 | Fixed rate 3.50% | USD | 678.7 | 703.2 | June 2029 |
October 2019 | Fixed rate 2.875% | USD | 678.7 | 703.2 | January 2027 |
TOTAL | 3,619.9 | 3,750.2 |
69
| US Credit facility | Rule 144A and Reg S bonds | |
| covenants level | covenants level | |
Loan to Value 46 | < 65% | < 65% |
ICR | > 1.5x | > 1.5x |
| FFO/NFD | na. | na. |
| Secured debt ratio | < 50% | < 45% |
Unencumbered leverage ratio 49 | > 1.5x | > 1.25x |
(€Mn) | December 31, 2023 | December 31, 2022 |
Amounts accounted for in B/S | ||
Long-term bonds and borrowings | 7,303.5 | 7,773.3 |
Current borrowings and amounts due to credit institutions | 991.3 | 752.3 |
Total financial liabilities | 8,294.8 | 8,525.6 |
Adjustments | ||
Amortisation of debt | (3.4) | 1.1 |
Accrued interests/issuance fees | (87.3) | (39.2) |
Total financial liabilities (nominal value) | 8,204.1 | 8,487.5 |
Cash & cash equivalents | (38.1) | (76.0) |
NET FINANCIAL DEBT | 8,166.0 | 8,411.5 |
(€Mn) | December 31, 2023 | December 31, 2022 |
Cash (1) | 38.1 | 76.0 |
Total asset | 38.1 | 76.0 |
Bank overdrafts & current accounts to balance out cash flow | - | - |
Total liabilities | - | - |
NET CASH AT PERIOD-END | 38.1 | 76.0 |
70
Fair value | ||||||
| movements | Currency | |||||
(€Mn) | December 31, 2022 | Addition | Decrease | in P&L | translation December 31, 2023 | |
Financial liabilities at amortised cost | 505.0 | 23.8 | - | - | (18.5) | 510.3 |
Commitment to non-controlling interests held by URW SE (a) | 505.0 | 23.8 | - | - | (18.5) | 510.3 |
Financial liabilities at fair value | 46.9 | - | (7.2) | (9.5) | (1.6) | 28.8 |
Commitment to non-controlling interests (b) | 34.7 | - | (7.2) | 0.4 | (1.2) | 26.7 |
Other commitments to non-controlling interests (c) | 12.2 | - | - | (9.9) | (0.4) | 2.0 |
Total commitment to non-controlling interests | 551.9 | 23.8 | (7.2) | (9.5) | (20.1) | 539.1 |
Total non-current | 460.4 | - | (7.2) | (9.5) | (16.3) | 427.7 |
| Total current | 91.5 | 23.8 | - | - | (3.7) | 111.5 |
i) The holders of Series A preferred shares are entitled to receive an annual dividend equal to 5.9% of the value of the preference shares.
B) INTERESTS HELD BY EXTERNAL PARTIES
i) As at December 31, 2023, the Jacobs Group holds 1,251,241 (December 31, 2022: 1,141,553) Series G units in the operating partnership.
Anthony Weigand redeemed 45,318 shares in full in October 2023. The holders have the right that requires WEA to purchase up to 10% of the
shares redeemed for cash.
ii) As at December 31, 2023, the previous owners of the Sunrise Mall hold 1,401,426 (December 31, 2022: 1,401,426) Series I units. At any time,
the holder (or the Holder’s Estate) has the right to require the operating partnership to redeem its Series I units at the Group’s discretion either
for: (i) cash; (ii) shares in WEA (with the holder having the right to exchange such WEA shares for stapled securities); or (iii) a combination of
both.
iii) As at December 31, 2023, 1,538,481 (December 31, 2022: 1,538,481) Series J units are outstanding. At the holder’s discretion, such holder
has the right to require the operating partnership to redeem its Series J units, at the Group’s discretion, either for: (i) cash; (ii) shares in WEA
(with the holder having the right to exchange such WEA shares for URW stapled securities); or (iii) a combination of both.
iv) The investor unit rights in the operating and property partnerships have a fixed life and are able to be redeemed either for: (i) cash, (ii)
shares in WEA; or (iii) a combination of both, at the Group’s discretion. At any time, after 19 May 2014, such holders have the right to require
WEA to redeem their WEA common shares, at the Group’s discretion, either for (i) cash; (ii) stapled securities; or (iii) a combination of both.
C) OTHER COMMITMENT TO NON-CONTROLLING INTERESTS
The other redeemable preference shares/units comprise: (i) Series H-2 Partnership Preferred Units (Series H-2 units); and (ii) Series A Partnership
Preferred Units (Series A units).
i) The former partners in the San Francisco Centre hold 360,000 (Series H-2 Units in the operating partnership) as December 31, 2023 (December
31, 2022: 360,000). Each Series H-2 unit will be entitled to receive quarterly distributions equal to $0.125 for the first four calendar quarters
after the Series H-2 units are issued (the Base Year) and for each calendar quarter thereafter, $0.125 multiplied by a growth factor. The growth
factor is an amount equal to one plus or minus, 25% of the percentage increase or decrease in the distributions payable with respect to a
partnership common unit of the operating partnership for such calendar quarter relative to 25% of the aggregate distributions payable with
respect to a partnership common unit for the Base Year.
71
Amounts recognised in the | ||||||
| Statement of Comprehensive | ||||||
| Income | ||||||
December 31, | Fair value adjustments of | Currency translation | Acquisitions/ | December 31, | ||
(€Mn) | 2022 | derivatives | disposals | 2023 | ||
Assets | ||||||
Derivatives at fair value Non-Current | 142.6 | 6.1 | (0.3) | (115.6) | 32.8 | |
• | Fair value | 142.6 | 6.1 | (0.3) | (115.6) | 32.8 |
Liabilities | ||||||
Derivatives at fair value | (45.4) | 13.5 | - | - | (31.9) | |
• | Fair value | (45.4) | 13.5 | - | - | (31.9) |
NET | 97.2 | 19.6 | (0.3) | (115.6) | 0.9 | |
Amounts recognised in the | |||||
| Statement of Comprehensive | |||||
Income | |||||
Fair value adjustments of | Currency translation | ||||
(€Mn) | December 31, 2021 | derivatives | December 31, 2022 | ||
Assets | |||||
Derivatives at fair value Non-Current | 76.8 | 65.2 | 0.6 | 142.6 | |
• | Fair value | 76.8 | 65.2 | 0.6 | 142.6 |
Liabilities | |||||
Derivatives at fair value | (445.5) | 400.1 | - | (45.4) | |
• | Fair value | (445.5) | 400.1 | - | (45.4) |
NET | (368.7) | 465.3 | 0.6 | 97.2 | |
8.5 RISK MANAGEMENT POLICY
The Group’s principal financial instruments comprise cash, receivables, payable, interest-bearing liabilities, other financial liabilities, other
investments and derivative financial instruments. The Group manages its exposure to key financial risks in accordance with the Group treasury
risk management policies.
The Group utilises derivative financial instruments, including forward exchange contracts, currency and interest rate options, currency and
interest rate swaps to manage the risks associated with foreign currency and interest rate fluctuations. Such derivative financial instruments are
recognised at fair value.
The Group has set defined policies and implemented a comprehensive hedging programme to manage interest and exchange rate risks.
Derivative instruments are transacted to achieve the economic outcomes in line with the Group’s treasury policy and hedging programme.
Derivative instruments are not transacted for speculative purposes. Accounting standards however require compliance with documentation,
designation and effectiveness parameters before a derivative financial instrument is deemed to qualify for hedge accounting treatment. These
documentation, designation and effectiveness requirements cannot be met in all circumstances. As a result, derivative instruments, other than
cross currency swaps that hedge net investments in foreign operations, are deemed not to qualify for hedge accounting and are recorded at fair
value. Gains or losses arising from the movement in fair values are recorded in the income statement.
The fair value of derivatives has been determined with reference to market observable inputs for contracts with similar maturity profiles. The
valuation is a present value calculation which incorporates interest rate curves, foreign exchange spot and forward rates, option volatilities and
the credit quality of all counterparties.
72
Financial liabilities | ||
(€Mn) | Fixed rate | Variable rate* |
Less than 1 year | 905.0 | - |
1 year to 2 years | - | 248.9 |
2 years to 3 years | - | - |
3 years to 4 years | 678.7 | - |
4 years to 5 years | 3,742.2 | 989.1 |
More than 5 years | 1,639.1 | - |
Total | 6,965.0 | 1,238.0 |
Financial liabilities | ||
(€Mn) | Fixed rate | Variable rate* |
Less than 1 year | 715.5 | - |
1 year to 2 years | 1,882.1 | 234.1 |
2 years to 3 years | - | 1,458.2 |
3 years to 4 years | 113.4 | 727.8 |
4 years to 5 years | 703.2 | - |
More than 5 years | 2,653.2 | - |
Total | 6,067.5 | 2,420.1 |
73
Outstanding total as at December 31, 2023 | Outstanding total as at December 31, 2022 | |||
(€Mn) | Fixed rate | Variable rate (1) | Fixed rate | Variable rate (1 ) |
Financial liabilities | (6,965.0) | (1,238.0) | (6,067.5) | (2,420.1) |
Financial assets | 38.1 | - | 76.0 | - |
Financial liabilities before hedging programme | (6,926.9) | (1,238.0) | (5,991.5) | (2,420.1) |
Micro-hedging | 905.0 | (905.0) | 937.6 | (937.6) |
Net financial liabilities after micro-hedging (2) | (6,022.0) | (2,142.9) | (5,053.9) | (3,357.7) |
Swap rate hedging (3) | - | 1,153.8 | - | 1,875.1 |
Net debt not covered by swaps | - | (989.1) | - | (1,482.6) |
Cap and floor hedging | - | - | - | - |
HEDGING BALANCE | - | (989.1) | - | (1,482.6) |
Hedging | Exposure net of | ||||
Currency | Assets | Liabilities | Net Exposure | instruments | hedges |
USD | 9,564.7 | (8,969.4) | 595.3 | - | 595.3 |
TOTAL | 9,564.7 | (8,969.4) | 595.3 | - | 595.3 |
Hedging | Exposure net of | ||||
Currency | Assets | Liabilities | Net Exposure | instruments | hedges |
USD | 10,176 | (8,856) | 1,320 | - | 1,320 |
TOTAL | 10,176 | (8,856) | 1,320 | - | 1,320 |
74
December 31, 2023 | December 31, 2022 | |||
Recurring | Recurring | |||
result | Equity | result | Equity | |
(€Mn) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) |
Impact of an increase of +10% in the EUR/USD exchange | (3.4) | (54.1) | (7.9) | (120.0) |
2023 | 2022 | |||
Assets subject to | Assets subject to | Assets subject to | Assets subject to | |
(€Mn) | 12 month ECL | Lifetime ECL | 12 month ECL | Lifetime ECL |
Trade receivable from activity | - | 49.0 | - | 71.7 (1) |
Other receivables | 963.0 | - | 76.9 | - |
Cash and cash equivalents | 38.1 | - | 76.0 | - |
Financial guarantee contracts | 309.1 | - | 379.1 | 113.1 (1) |
Gross amount at 31 December | 1,310.2 | 49.0 | 532.0 | 184.8 |
75
(€Mn) | 2023 | 2022 |
TRADE RECEIVABLE | ||
Opening loss allowance at 1 January | 57.1 | 75.5 |
(Reversal)/Addition in loan loss allowance recognised in profit or loss during the year | (4.0) | (11.5) |
Receivables written off during the year as uncollectible | (2.7) | (10.7) |
Changes due to FX differences | (3.3) | 3.7 |
Closing loss allowance at 31 December (1 ) | 47.1 | 57.1 |
(€Mn) | 2023 | 2022 | |
FINANCIAL GUARANTEE CONTRACTS | |||
Opening loss allowance at 1 January | 53.8 | 111.2 | |
Additions recognised in profit or loss during the period | - | 11.7 | |
Used (2) | - | - | |
Provision released during the year | (51.7) | (2) | (75.9) |
Changes due to FX differences | (2.1) | 6.7 | |
Closing loss allowance at 31 December (3) | - | 53.8 |
76
Carrying | |||||||
amount (1) | Less than 1 year | 1 year to 5 years | More than 5 years | ||||
December 31, | |||||||
(€Mn) | 2023 | Interest | Redemption | Interest | Redemption | Interest | Redemption |
| BONDS, BORROWINGS AND AMOUNTS DUE | |||||||
TO CREDIT INSTITUTIONS | |||||||
Bonds and EMTNs | (3,619.9) | (138.3) | (905.0) | (388.2) | (1,131.2) | (774.3) | (1,583.7) |
| Bank borrowings and other financial | |||||||
liabilities (2) | (4,584.2) | (232.6) | - | (737.5) | (4,527.7) | (256.5) | (56.5) |
FINANCIAL DERIVATIVES | |||||||
Derivative financial liabilities | |||||||
Derivatives without a hedging relationship | (31.9) | (24.1) | - | (80.0) | - | - | - |
Derivative financial assets | |||||||
Derivatives without a hedging relationship | 32.8 | 35.7 | - | 102.6 | - | - | - |
| COMMITMENT TO NON-CONTROLLING | |||||||
INTEREST | |||||||
| Commitment to non-controlling interest held | |||||||
by URW SE | (399.6) | (23.6) | - | (94.3) | - | (6.0) | (399.6) |
77
Amounts recognised in statement of | ||||||
| financial position according to IFRS 9 | ||||||
Carrying | ||||||
Amount | Fair value | Fair value | ||||
| Categories in accordance | December | Amortised | recognised in | recognised in | ||
December 31, 2023 (€Mn) | with IFRS 9 | 31, 2023 | Cost | OCI | profit or loss | Fair value |
ASSETS | ||||||
Financial assets | FAAC/FAFVTPL | 55.1 | 5.2 | - | 49.9 | 55.1 |
Derivatives at fair value | FAFVTPL | 32.8 | - | - | 32.8 | 32.8 |
Trade receivables from activity | FAAC | 73.8 | 73.8 | - | - | 73.8 |
Other receivables (1) | FAAC | 955.2 | 955.2 | - | - | 952.8 |
Cash and cash equivalents | FAAC | 38.1 | 38.1 | - | - | 38.1 |
1,155.0 | 1,072.3 | - | 82.7 | 1,152.6 | ||
LIABILITIES | ||||||
Commitment to non-controlling interests | FLAC/FLFVTPL | 539.2 | 510.5 | - | 28.7 | 568.7 |
Financial debts | FLAC | 8,300.9 | 8,300.9 | - | - | 8,045.7 |
Derivatives at fair value | FLFVTPL | 31.9 | - | - | 31.9 | 31.9 |
Non-current amounts due on investments | FLAC | 2.0 | 2.0 | - | - | 2.0 |
Other non-current liabilities (2) | FLAC | 27.3 | 27.3 | - | - | 27.3 |
Amounts due to suppliers and other current debt (3) | FLAC | 139.8 | 139.8 | - | - | 139.8 |
9,041.1 | 8,980.5 | - | 60.6 | 8,815.4 |
Amounts recognised in statement of | ||||||
| financial position according to IFRS 9 | ||||||
Carrying | ||||||
Amount | Fair value | Fair value | ||||
| Categories in accordance | December | Amortised | recognised in | recognised in | ||
| December 31, 2022 (€Mn) | with IFRS 9 | 31, 2022 | Cost | OCI | profit or loss | Fair value |
ASSETS | ||||||
Financial assets | FAAC/FAFVTPL | 118.2 | 4.0 | - | 114.2 | 118.2 |
Derivatives at fair value | FAFVTPL | 142.6 | - | - | 142.6 | 142.6 |
Trade receivables from activity | FAAC | 86.3 | 86.3 | - | - | 86.3 |
Other receivables (1) | FAAC | 70.6 | 70.6 | - | - | 70.6 |
Cash and cash equivalents | FAAC | 76.0 | 76.0 | - | - | 76.0 |
493.7 | 236.9 | - | 256.8 | 493.7 | ||
LIABILITIES | ||||||
Commitment to non-controlling interests | FLAC/FLFVTPL | 551.9 | 505.0 | - | 46.9 | 533.5 |
Financial debts | FLAC | 8,569.2 | 8,569.2 | - | - | 7,844.8 |
Derivatives at fair value | FLFVTPL | 45.4 | - | - | 45.4 | 45.4 |
Non-current amounts due on investments | FLAC | 6.3 | 6.3 | - | - | 6.3 |
Other non-current liabilities (2) | FLAC | 31.4 | 31.4 | - | - | 31.4 |
Amounts due to suppliers and other current debt (3) | FLAC | 168.5 | 168.5 | - | - | 168.5 |
9,372.7 | 9,280.4 | - | 92.3 | 8,629.8 |
78
79
Fair value measurement as at December 31, 2023 | ||||
(€Mn) | Total | Level 1 | Level 2 | Level 3 |
ASSETS | ||||
Fair value through profit or loss | ||||
Derivatives | 32.8 | - | 32.8 | - |
Financial assets | 49.9 | - | - | 49.9 |
TOTAL | 82.7 | - | 32.8 | 49.9 |
LIABILITIES | ||||
Fair value through profit or loss | ||||
Commitment to non-controlling interests | 28.8 | - | - | 28.8 |
Derivatives | 31.9 | - | 31.9 | - |
TOTAL | 60.2 | - | 31.9 | 28.8 |
Fair value measurement as at December 31, 2022 | ||||
(€Mn) | Total | Level 1 | Level 2 | Level 3 |
ASSETS | ||||
Fair value through profit or loss | ||||
Derivatives | 142.6 | - | 142.6 | - |
Financial assets | 114.2 | - | - | 114.2 |
TOTAL | 256.8 | - | 142.6 | 114.2 |
LIABILITIES | ||||
Fair value through profit or loss | ||||
Commitment to non-controlling interests | 46.9 | - | - | 46.9 |
Derivatives | 45.4 | 45.4 | - | |
TOTAL | 92.4 | - | 45.4 | 46.9 |
Financial assets | Commitment to | |
(€Mn) | non-controlling interest | |
December 31, 2021 | 114.6 | 102.2 |
Fair value movements in P&L | (7.5) | (64.2) |
Currency translation | 7.1 | 8.9 |
December 31, 2022 | 114.2 | 46.9 |
Fair value movements in P&L | (61.7) | (9.5) |
Other movements | - | (7.2) |
Currency translation | (2.6) | (1.6) |
December 31, 2023 | 49.9 | 28.8 |
80
NOTE 9 ● TAXES
(€Mn) | 2023 | 2022 |
Recurring deferred and current tax on: | ||
• Other recurring results | (2.9) | (1.2) |
Non-recurring deferred and current tax on: | ||
• Change in fair value of investment properties and impairment of intangible assets | (5.6) | 17.7 |
• Other non-recurring results | 43.6 | (4.8) |
TOTAL TAX INCOME/(EXPENSE) | 35.1 | 11.7 |
(€Mn) | 2023 | 2022 |
Current tax | 41.3 | (6.2) |
Deferred tax | (6.1) | 17.9 |
TOTAL TAX | 35.1 | 11.7 |
81
(€Mn) | % | 2023 | % | 2022 |
Reconciliation of effective tax rate | ||||
Result before tax | (727.5) | (245.4) | ||
Income tax using the average tax rate | 26.0% | 189.1 | 26.3% | 64.6 |
Tax exempt profits (REIT- regimes) | (8.8%) | (64.2) | 36.7% | 90.1 |
Non-deductible costs | - | - | (0.0%) | (0.1) |
Effect of non-recognised tax losses | - | - | (33.7%) | (82.7) |
Share of result of companies accounted for using the equity method | (9.9%) | (71.7) | (23.7%) | (58.1) |
Effect of tax provisions | (2.2%) | (16.1) | (0.8%) | (2.1) |
Other | (0.3%) | (1.9) | - | - |
TOTAL TAX | 4.8% | 35.1 | 4.8% | 11.7 |
82
December 31, | |||||
(€Mn) | 2022 | Decrease/Increase | Reclassification | Currency translation | December 31, 2023 |
Deferred tax on investment properties | (58.1) | 6.0 | - | 1.9 | (50.3) |
Deferred tax on intangible assets | (53.4) | (11.5) | - | 2.1 | (62.8) |
TOTAL DEFERRED TAX LIABILITIES | (111.5) | (5.5) | - | 4.0 | (113.1) |
Other deferred tax assets | 0.6 | (0.6) | - | - | - |
TOTAL DEFERRED TAX ASSETS | 0.6 | (0.6) | - | - | - |
December 31, | |||||
(€Mn) | 2021 | Decrease/Increase | Reclassification | Currency translation | December 31, 2022 |
Deferred tax on investment properties | (53.2) | (1.6) | - | (3.3) | (58.1) |
Deferred tax on intangible assets | (68.3) | 19.4 | - | (4.5) | (53.4) |
TOTAL DEFERRED TAX LIABILITIES | (121.5) | 17.7 | - | (7.7) | (111.5) |
Other deferred tax assets | 0.4 | 0.2 | - | - | 0.6 |
TOTAL DEFERRED TAX ASSETS | 0.4 | 0.2 | - | - | 0.6 |
(€Mn) | December 31, 2023 | December 31, 2022 |
Tax loss carry-forwards not recognised | 1,298.2 | 927.5 |
TOTAL UNRECOGNISED TAX-BASIS | 1,298.2 | 927.5 |
(€Mn) | December 31, 2023 | December 31, 2022 |
2024 | 8.0 | 8.1 |
2025 | - | - |
2026 | - | - |
2027 | 75.0 | - |
2028 | - | - |
Unlimited | 1,215.2 | 919.5 |
TOTAL | 1,298.2 | 927.5 |
83
(€Mn) | December 31, 2022 | Allocations | Reversals used | Reversals not used | Currency translation | December 31, 2023 |
Non-current provisions | 35.0 | - | - | (23.2) | (0.7) | 11.1 |
Current provisions | 1.4 | - | - | (0.1) | - | 1.3 |
Total | 36.4 | - | - | - | - | 12.4 |
(€Mn) | December 31, 2023 | December 31, 2022 |
Tax and social liabilities (1) | 152.9 | 196.5 |
Other liabilities (2) | 22.0 | 40.1 |
TOTAL OTHER CURRENT LIABILITIES | 174.7 | 236.7 |
NOTE 12 ● AMOUNTS DUE ON INVESTMENTS
As at December 31, 2023, the non-current amounts due on investments are €2.0 Mn (December 31, 2022: €6.3 Mn) and the current amounts due
on investments are €41.3 Mn (December 31, 2022: €38.0 Mn). The current amounts due on investments relates mainly to payables on projects of
Westfield Century City €9.9 Mn (December 31, 2022: €12.5 Mn) and Westfield Old Orchard €19.9 Mn (December 31, 2022: €6.1 Mn). Remaining
amounts relate to several projects.
84
Regions | 2023 | 2022 |
United States | 448 | 533 |
The Netherlands | 5 | 5 |
TOTAL | 453 | 538 |
(€Mn) | 2023 | 2022 |
Fixed income | 61.2 | 68.1 |
Short-Term Incentive | 15.9 | 18.9 |
Long-Term incentive | 2.9 | 3.2 |
Other benefits | 7.4 | 8.8 |
TOTAL | 87.3 | 99.0 |
Potential | |||||||
Adjusted | Number of | Adjustments | Number of | Number of | additional | ||
subscription | options | in number of | options | options | number of | ||
Plan | Exercise period (1) | price (€) (2) | granted | options (2) | cancelled | exercised | shares (3) |
2023 plan | From 13/03/2026 to | 58.98 | 129,177 | - | 4,222 | - | 124,955 |
08/03/2031 | |||||||
2022 plan | From 10/03/2025 to | 66.68 | 195,398 | - | 37,581 | - | 157,817 |
08/03/2030 | |||||||
2021 plan | From 18/05/2024 to | 69.41 | 187,853 | - | 38,398 | - | 149,185 |
19/05/2029 | |||||||
2020 plan | From 22/03/2023 to | 92.03 | 182,146 | - | 128,484 | - | 53,662 |
21/03/2028 | |||||||
2019 plan | From 20/03/2022 to | 144.55 | 145,338 | - | 56,798 | - | 88,540 |
19/03/2027 | |||||||
TOTAL | 839,642 | - | 265,483 | - | 574,159 |
85
2023 | 2022 | |||
Weighted average | Weighted average | |||
Number | price (€) | Number | price (€) | |
Outstanding at the beginning of the period | 584,593 | 87.54 | 426,725 | 96.31 |
Allocated over the period | 129,177 | 58.98 | 195,398 | 66.68 |
Cancelled over the period | (139,611) | 91.74 | (37,530) | 78.68 |
Exercised over the period | - | n/a | - | n/a |
Average share price on date of exercise | n/a | n/a | n/a | n/a |
Outstanding at the end of the period | 574,159 | 80.09 | 584,593 | 87.54 |
Of which exercisable at the end of the period (1) | 142,202 | 107,193 | - |
Number of performance | Number of performance | Number of performance | Potential additional | |
Starting date of the vesting period (1) | shares allocated | shares cancelled | shares acquired | number of shares (2) |
March 13, 2023 | 76,977 | 2,220 | - | 74,757 |
March 8, 2022 | 143,298 | 24,969 | 1,684 | 118,329 |
May 18, 2021 | 73,393 | 15,021 | 495 | 58,372 |
March 21, 2020 | 100,698 | 80,249 | 20,449 | - |
March 19, 2019 | 33,422 | - | - | - |
TOTAL | 394,366 | 122,459 | 22,628 | 251,458 |
Number of retention | Number of retention | Number of retention | Potential additional | |
Starting date of the vesting period (1) | shares allocated | shares cancelled | shares acquired | number of shares (2) |
March 13, 2023 | 13,679 | 485 | 405 | 12,789 |
(K€) Paid in: | 2023 | 2022 |
Fixed Income | 3,508 | 3,467 |
Short-Term Incentive | 2,801 | 2,634 |
Pension | 187 | 168 |
Other benefits (1) | 620 | 602 |
Share-based payment | 1,438 | 1,513 |
TOTAL | 8,555 | 8,384 |
86
Total number of issued and | |
paid shares | |
As at December 31, 2021 | 231,842,731 |
Capital increase Class A shares | 66,931 |
Capital increase reserved for URW Group Savings Plan | 105,741 |
As at December 31, 2022 | 232,015,403 |
Capital increase Class A shares | 145,895 |
Capital increase reserved for URW Group Savings Plan | 128,408 |
As at December 31, 2023 | 232,289,706 |
87
2023 | 2022 | |
Average number of shares (undiluted) | 232,213,679 | 231,965,297 |
Dilutive impact | ||
Attributed performance shares (unvested) (1) | 920,345 | 733,332 |
AVERAGE NUMBER OF SHARES (DILUTED) | 233,134,024 | 232,698,629 |
Potential | |||||||||
Adjusted | Adjustments | Number of | Number of | additional | |||||
subscription | Number of | in number of | options | options | number of | ||||
Plan | Exercise period (1) | price (€) (2) options granted | options (2) | cancelled | exercised | shares (3) | |||
2016 | from 09/03/2020 to | 227.24 | 611,608 | - | 609,695 | 1,913 | - | ||
2015 plan (n°8) | 08/03/2023 | ||||||||
2017 | from 08/03/2021 to | 218.47 | 611,611 | - | 272,475 | - | 339,136 | ||
07/03/2024 | |||||||||
| 2018 plan (n°9) | 2018 | From 06/03/2022 to | 190.09 | 630,135 | - | 295,847 | - | 334,288 | |
05/03/2025 | |||||||||
2019 plan (n°10) | 2019 | From 20/03/2022 to | 144.55 | 748,372 | - | 301,456 | - | 446,916 | |
19/03/2026 | |||||||||
2020 plan (n°11) | 2020 | From 22/03/2023 to | 92.03 | 885,291 | - | 633,094 | - | 252,197 | |
21/03/2027 | |||||||||
2021 plan (n°12) | 2021 | From 19/05/2024 to | 69.41 | 950,295 | - | 188,460 | - | 761,835 | |
18/05/2029 | |||||||||
2022 plan (n°13) | 2022 | From 09/03/2025 to | 66,68 | 1,217,386 | - | 202,421 | - | 1,014,965 | |
08/03/2030 | |||||||||
2023 plan (n°14) | 2023 | From 13/03/2026 to | 58.98 | 819,684 | - | 6,928 | - | 812,756 | |
13/03/2031 | |||||||||
TOTAL | 6,474,382 | - | 2,510,376 | 1,913 | 3,962,093 | ||||
Number of performance | Number of performance | Number of performance | Potential additional | |
Starting date of the vesting period (1) | shares allocated | shares cancelled | shares acquired | number of shares (2) |
May 2021 | 371,846 | 73,483 | 495 | 297,868 |
March 2022 | 808,872 | 119,299 | 1,684 | 687,889 |
March 2023 | 459,472 | 2,220 | - | 457,252 |
TOTAL | 1,640,190 | 195,002 | 2,179 | 1,443,009 |
Number of retention | Number of retention | Number of retention | Potential additional | |
Starting date of the vesting period | shares allocated | shares cancelled | shares acquired | number of shares |
March 2023 | 130,286 | 3,191 | 405 | 126,690 |
TOTAL | 130,286 | 3,191 | 405 | 126,690 |
NOTE 15 ● OFF-BALANCE SHEET COMMITMENTS AND CONTINGENT LIABILITIES
All significant commitments are shown below. The Group does not have any complex commitments.
December 31, | December 31, | |||||
Commitments given (€Mn) | Description | Maturities | 2023 | 2022 | ||
1a) Commitments related to Group financing – Commitments given by fully consolidated entities | 1,283.4 | 428.1 | ||||
Financial guarantees given | • Mortgages and first lien lenders | 2025 | 1,086.0 | 113.4 | ||
| • Guarantees relating to entities under equity method | ||||||
Financial guarantees given | or not consolidated⁽¹⁾ | 2025 to 2026 | 197.4 | 314.7 | ||
1b) Commitments related to Group financing – Commitments given by entity under equity method | 616.1 | 995.1 | ||||
Non - Financial guarantees given | • Mortgages and first lien lenders⁽ 2 ⁾ | 2024 | to 2030 | 616.1 | 995.1 | |
2a) Commitments related to Group operational activities – Fully consolidated | 1.2 | 1.6 | ||||
• | Rental of premises and equipment (lease payable) | 2024+ | 1.2 | 1.6 | ||
2b) Commitments related to Group operational activities – Entity under equity method | 1.5 | 18.9 | ||||
| 2024+ | ||||||
• | Residual commitments for works contracts and | |||||
forward purchase agreements | 0.5 | 17.8 | ||||
• Rental of premises and equipment (lease payable) | 2024+ | 1.0 | 1.1 | |||
TOTAL COMMITMENTS GIVEN | 1,902.3 | 1,443.8 | ||||
| December 31, | December 31, | ||||
Commitments received (€Mn) | Description | Maturities | 2023 | 2022 | |
1) Commitments related to Group financing | |||||
Financial guarantees received | • | Refinancing agreements obtained but not used | 2024+ | 1,344.1 | 2,988.3 |
2a) Commitments related to Group operational activities – Fully consolidated | |||||
Other contractual commitments received related to operations | • | Future minimal rents | 2024+ | 919.2 | 1,027.9 |
2a) Commitments related to Group operational activities – Entity under equity method | |||||
Other contractual commitments received related to operations | • | Future minimal rents | 2024+ | 1,009.7 | 1,167.9 |
| 3,273.0 | 5,184.2 | ||||
TOTAL COMMITMENTS RECEIVED |
88
89
% interest | % control | % interest | ||||
December 31, | December | December 31, | ||||
List of the main consolidated companies | Country | Method | 2023 | 31, 2023 | 2022 | |
Unibail-Rodamco-Westfield N.V. | the Netherlands | FC | 100.00 | 100.00 | 100.00 | |
WFD Unibail-Rodamco Real Estate B.V. | the Netherlands | FC | 100.00 | 100.00 | 100.00 | |
URW America Inc. | United States | FC | 100.00 | 100.00 | 100.00 | |
WEA Holdings, LLC | United States | FC | 92.40 | 92.40 | 92.40 | |
URW WEA LLC | United States | FC | 92.40 | 92.40 | 92.40 | |
Westfield America Shopping Centers, LP | United States | FC | 92.40 | 92.40 | 92.40 | |
Westfield U.S Holdings, LLC | United States | FC | 92.40 | 92.40 | 92.40 | |
Westfield America, LP | United States | FC | 90.80 | 90.80 | 90.80 | |
Westfield, LLC | United States | FC | 90.80 | 90.80 | 90.80 | |
WHL USA Acquisitions, Inc. | United States | FC | 74.80 | 74.80 | 74.80 | |
Westland Properties, LLC | United States | FC | 92.40 | 92.40 | 92.40 | |
URW WEA LLC | United States | FC | 92.40 | 92.40 | 92.40 | |
Old Orchard Urban Limited Partnership | United States | FC | 90.80 | 90.80 | 90.80 | |
Roseville Shoppingtown, LLC | United States | FC | 90.80 | 90.80 | 90.80 | |
Century City Mall, LLC | United States | FC | 90.80 | 90.80 | 90.80 | |
New WTC Retail Owner, LLC | United States | FC | 90.80 | 90.80 | 90.80 |
% interest | % control | % interest | |||
December 31, | December | December 31, | |||
List of the main JV accounted on equity method (2) | Country | Method (1) | 2023 | 31, 2023 | 2022 |
Valley Fair UTC LLC | United States | EM-JV | 50.00 | 50.00 | 50.00 |
Westland Garden State Plaza, LP | United States | EM-JV | 50.00 | 50.00 | 50.00 |
GSP Sponsor 1 LP (Garden State Plaza) | United States | EM-JV | 50.00 | 50.00 | 50.00 |
WEA Southcenter LLC | United States | EM-JV | 55.00 | 55.00 | 55.00 |
Westfield Topanga Owner LLC | United States | EM-JV | 55.00 | 55.00 | 55.00 |
Montgomery Mall of Maryland LLC | United States | EM-JV | 50.00 | 50.00 | 50.00 |
Culver City Mall LLC | United States | EM-JV | 55.00 | 55.00 | 55.00 |
Wheaton Plaza Regional Shopping Center LLC | United States | EM-JV | 52.60 | 52.60 | 52.60 |
Annapolis Mall Owner LLC | United States | EM-JV | 55.00 | 55.00 | 55.00 |
Oakridge Mall LLC | United States | EM-JV | 55.00 | 55.00 | 55.00 |
Plaza Bonita LLC | United States | EM-JV | 55.00 | 55.00 | 55.00 |
90
% interest | % control | % interest | |||
December 31, | December | December 31, | |||
List of the main JV accounted on equity method (2) | Country | Method | 2023 | 31, 2023 | 2022 |
Sherman Oaks Fashion Associates, LP | United States | EM-JV | 50.00 | 50.00 | 50.00 |
NOTE 17 ● SUBSEQUENT EVENTS
There have been no material subsequent events that management are aware about at March 19, 2024, that require adjustment to, or disclosure
in, the financial statements.
91
3.3 COMPANY ONLY FINANCIAL STATEMENTS AS AT
DECEMBER 31, 2023
3.3.1 COMPANY BALANCE SHEET AS AT DECEMBER 31, 2023
(before profit appropriation)
(€ thousands)
Notes
December 31,
2023
December 31,
2022
ASSETS
Property, plant and equipment
33
27
Investments in subsidiaries
4
1,111,694
1,742,824
Derivatives
9
30,723
142,648
Total non-current assets
1,142,450
1,885,499
Receivables
5
17,170
12,122
Cash and cash equivalents
6
612
908
Total current assets
17,782
13,030
TOTAL ASSETS
1,160,232
1,898,529
LIABILITIES AND EQUITY
Shareholders’ equity
7
Share capital
116,121
116,021
Additional paid-in capital
2,243,352
2,243,506
(1)
Foreign currency translation reserve
211,293
257,093
Revaluation reserve
74,963
335,690
Retained earnings
(3,175,820)
(3,284,047)
Capital securities
2,000,931
1,501,277
Result for the period
(609,565)
(152,300)
Total equity
861,275
1,017,240
Borrowings and financial liabilities
8
244,282
777,224
Derivatives
9
31,905
45,394
Total non-current liabilities
276,187
822,618
Other liabilities
10
22,770
58,671
Total current liabilities
22,770
58,671
Total liabilities
298,957
881,289
TOTAL EQUITY AND LIABILITIES
1,160,232
1,898,529
(1) The amount is restated with €245k for disclosure purposes in 2022, the restatement is immaterial.
3.3.2 COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2023
(€ thousands)
Notes
2023
2022
Other income
2,193
2,272
1 – TOTAL OPERATING INCOME
2,193
2,272
Administrative expenses
11
(5,050)
(3,951)
2 – TOTAL OPERATING EXPENSES
(5,050)
(3,951)
Financial income
62,545
575,476
Financial expenses
(83,922)
(154,089)
3 – FINANCIAL RESULT
12
(21,377)
421,387
4 –RESULT BEFORE TAX
(24,234)
419,706
Income tax
13
-
-
Result from subsidiaries
14
(585,330)
(572,006)
5 – NET RESULT AFTER TAX
(609,565)
(152,300)
92
3.4 NOTES TO THE COMPANY ONLY FINANCIAL STATEMENTS
NOTE 1 ● GENERAL
Unibail-Rodamco-Westfield N.V. (“URW NV” or the “Company”) is a public limited liability company and domiciled in the Netherlands. Its shares
are publicly traded on the Euronext Paris Stock Exchange, as well as in the form of CDIs on the Australian Securities Exchange. The Company was
incorporated as Unibail-Rodamco B.V., a private company with limited liability under the laws of the Netherlands on February 14, 2018. On March
22, 2018, the Company changed its legal name to WFD Unibail-Rodamco N.V. and converted its legal form to a public limited liability company
pursuant to a notarial deed of amendment and conversion in accordance with a resolution of the General Meeting adopted on March 15, 2018. In
June 2020, the corporate name changed from WFD Unibail-Rodamco N.V. to Unibail-Rodamco-Westfield N.V. The Company has its corporate seat
in Amsterdam and its registered office is located at Schiphol Boulevard 315 Schiphol in the Netherlands. The chamber of commerce number is
70898618.
NOTE 2 ● ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company only financial statements are part of the 2023 consolidated financial statements of URW NV.
The Company only financial statements have been prepared in accordance with Title 9, Book 2 of the Dutch Civil Code. For setting the principles
for the recognition and measurement of assets and liabilities and determination of the result for its company financial statements, the Company
makes use of the option provided in section 2:362(8) of the Dutch Civil Code. This means that the principles for the recognition and measurement
of assets and liabilities and determination of the result (hereinafter referred to as principles for recognition and measurement) of the company
only financial statements are the same as those applied for the consolidated EU-IFRS financial statements. Reference is made to the notes to the
consolidated financial statements.
The comparatives figures are from the period January 1, 2022, to December 31, 2022.
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries and other entities in the Company financial statements are accounted for using the equity method. Goodwill paid
upon acquisition of investments in group companies or associates is included in the net equity value of the investments and is not shown separately
on the face of the balance sheet.
AMOUNTS DUE FROM GROUP COMPANIES
Amounts due from group companies are stated initially at fair value and subsequently at amortised cost. Amortised cost is determined using the
effective interest rate. The company recognise a credit loss for financial assets (such as a loan) based on an expected credit loss (ECL) which
will occur in the coming twelve months or — after a significant decrease in credit quality or when the simplified model can be used — based on
the entire remaining loan term. For intercompany receivables the ECL would be applicable as well, however this could cause differences between
equity in the consolidated and separate financial statements. For this reason, the company elected to eliminate these differences through the
respective receivable account in the separate financial statements.
RESULTS FROM SUBSIDIARIES
The result of subsidiaries consists of the share of the Company in the result of these subsidiaries. Results on transactions involving the transfer
of assets and liabilities between the Company and its subsidiaries and mutually between subsidiaries themselves, are eliminated to the extent
that they can be considered as not realised.
NOTE 3 ● SIGNIFICANT EVENTS OF THE YEAR
Please refer to Note 2.1 of the consolidated financial statements.
93
NOTE 4 ● INVESTMENTS IN SUBSIDIARIES
2023 CHANGE
(€ thousands)
December 31, 2022
Direct equity
movement
Exchange
difference Dividends Investments
Result from
subsidiaries after tax
December 31, 2023
Group subsidiary investments
1,742,824
-
(45,800)
-
-
(585,330)
1,111,694
TOTAL
1,742,824
-
(45,800)
-
-
(585,330)
1,111,694
2022 CHANGE
(€ thousands)
December 31, 2021
Direct equity
movement
Exchange
difference Dividends Investments
Result from
subsidiaries after tax December 31, 2022
Group subsidiary investments
2,172,530
-
142,300
-
-
(572,006)
1,742,824
TOTAL
2,172,530
-
142,300
-
-
(572,006)
1,742,824
Investments in subsidiaries and other entities in which the Company either exercises voting control or effective management responsibility are
valued at equity method.
During the period, the Company has a EUR current account facility with WFD Unibail-Rodamco Real Estate B.V. for €10.0 Mn (December 31, 2022:
€10.0 Mn).
SUBSIDIARIES AND INVESTMENTS
The Company is the holding company and has the following direct and indirect significant financial interests:
Company
Country
Capital held %
December 31, 2023
Capital held %
December 31, 2022
WFD Unibail-Rodamco Real Estate B.V.
the Netherlands
100.00
100.00
URW America Inc.
United States
100.00
100.00
URW WEA LLC
United States
92.40
92.40
NOTE 5 ● RECEIVABLES
(€ thousands)
December 31, 2023
December 31, 2022
Receivable from URW SE
14,386
9,682
Receivable from group companies
2,145
-
VAT receivables
559
222
Other receivables
80
2,217
TOTAL
17,170
12,122
The receivable from URW SE relates to the interest receivable on the swaps and there is no significant ECL allowance as at December 31, 2023
(December 31, 2022: no significant ECL allowance).
NOTE 6 ● CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at hand and are held with banks. Cash and cash equivalents are freely available. The Company considers
that its cash and cash equivalents have a low credit risk based on the external credit ratings of the banks.
94
NOTE 7 ● SHAREHOLDERS’ EQUITY
(€ thousands)
Share
capital
Additional
paid-in capital
Foreign
currency
translation
reserves
Revaluation
reserve
Retained
earnings
Result for
the period
Capital
securities
Total
Shareholders’
equity
EQUITY AS AT DECEMBER 31,
2021
115,921
2,243,252
114,793
237,063
(2,397,020)
(788,200)
1,251,377
777,186
Net result
-
-
-
-
-
(152,300)
-
(152,300)
Other comprehensive income
-
-
142,300
-
-
-
-
142,300
Increase in capital
100
-
-
-
-
-
-
100
Appropriation of result
-
-
-
-
(788,200)
788,200
-
-
Restatement of hybrid securities
-
-
-
-
(200)
-
-
(200)
Amendment related party
liabilities
-
-
-
-
-
-
249,900
249,900
Other movements
-
254
-
98,627
(98,627)
-
-
254
EQUITY AS AT DECEMBER 31,
2022
116,021
2,243,506
257,093
335,690
(3,284,047)
(152,300)
1,501,277
1,017,240
Net result
-
-
-
-
-
(609,565)
-
(609,565)
Other comprehensive income
-
-
(45,800)
-
-
-
-
(45,800)
Increase in capital
100
(154)
-
-
-
-
-
(54)
Appropriation of result
-
-
-
-
(152,300)
152,300
-
-
Restatement of hybrid securities
-
-
-
-
(200)
-
-
(200)
Amendment related party
liabilities
-
-
-
-
-
-
499,654
499,654
Other movements
-
-
-
(260,727)
260,727
-
-
-
EQUITY AS AT DECEMBER 31,
2023
116,121
2,243,352
211,293
74,963
(3,175,820)
(609,565)
2,000,931
861,275
If URW NV revalues an asset, it recognises a revaluation reserve in equity unless this upward revaluation is a reversal of a prior downward
revaluation. In that case, the upward revaluation is taken to the income statement.
Any downward revaluations, including permanent diminutions in value, are deducted from the revaluation reserve, subject to maintaining the
revaluation reserve at the statutory minimum. The statutory minimum requires that the reserve is at least equal to the sum of the upward
revaluations above cost (taking into account any accumulated depreciation and impairment losses), relating to the assets still held at the balance
sheet date. Any downward revaluations which would take the reserve below zero must be taken to the income statement.
CHANGES IN THE NUMBER OF SHARES COMPRISING THE SHARE CAPITAL
Number of shares
As at December 31, 2021
231,842,731
Capital increase Class A shares
66,931
Capital increase reserved for URW Company Savings Plan
105,741
As at December 31, 2022
232,015,403
Capital increase Class A shares
145,895
Capital increase reserved for URW Company Savings Plan
128,408
As at December 31, 2023
232,289,706
The authorised share capital of the Company as at December 31, 2023, amounts to €550 Mn divided over 660 million ordinary class A shares and
440 million class B shares of €0.50 per share.
The issued and paid-up share capital amounts to €116.1 Mn, formed by 139,041,391 ordinary A shares and 93,248,315 ordinary B shares as at
December 31, 2023. Class B shares are shares carrying one vote per share and ordinary dividend rights. All class B shares are held by URW SE.
The Class A shares of the Company are stapled with the shares in URW SE (Stapled shares). As a consequence of the stock options plans and
performance shares of URW SE will have also a dilutive impact on the shares of the Company (with a share issuance at that time).
95
SHARE PREMIUM
Share premium is paid up share capital in excess of nominal value. The amount of share premium is €2,243.1 Mn as at December 31, 2023
(December 31, 2022: €2,243.3 Mn).
FOREIGN CURRENCY TRANSLATION RESERVE
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
CAPITAL SECURITIES
The €2 Mn hybrid securities, as included in the capital security line is a perpetual, deeply subordinated instrument without voting rights. The
capital instrument is issued for €2.0 Mn cash in 2018 and is accounted for in equity, mainly because the company has the discretion not to pay
interest or the principal. The amount remains unchanged in 2023.
As per December 31, 2023, an additional part of the intra-group loan of €500 Mn with URW SE has been reclassed into equity, reference is made
to note 2.1.3.
2022
On December 31, 2022, part of the intra-group loan of €250 Mn with URW SE has been reclassed into equity, reference is made to note 2.2.2.
DIVIDENDS
No dividends were declared or paid by the Company during the period of this financial year.
REVALUATION RESERVE
The revaluation reserve comprises of the reserve for the fair value gain on investment properties and derivatives. The decrease to the revaluation
reserve is -€260.7 Mn (December 31, 2022 was +€98.6 Mn).
UNAPPROPRIATED RESULT
The Management Board proposes, with consent of the Supervisory Board, to the General Meeting to appropriate the result after tax for 2023 as
follows: to add the remaining loss amount of -€609.6 Mn (December 2022: -€152.3 Mn) to the retained earnings.
NOTE 8 ● BORROWINGS AND FINANCIAL LIABILITIES
(€ thousands)
December 31,
2022
Additional
loans
Loans
decrease
Reclass
Amortisation
December 31,
2023
Debt to URW SE
777,836
52,252
621,596
35,800
-
244,292
Charges and premiums on issues of borrowing with URW SE
(612)
-
602
-
-
(10)
TOTAL
777,224
52,252
622,198
35,800
-
244,282
During the period, URW NV has an interest-bearing loan from URW SE. An additional part (€500 Mn) of the loan with an original nominal value of
€1,250 Mn has been converted into equity on December 31, 2023, reference is made to note 2.1.3. The remaining amount of the loan is €55.4
Mn (December 31, 2022: €543.7 Mn) as at December 31, 2023. The interest rate of the loan is based on a fixed rate from and including the issue
date to, but excluding, October 25, 2023. After each 5 years the interest rate is reset at 5YR Mid-swaps plus relevant margin. The maturity date
of the loan is perpetual.
During the period, URW NV has an interest-bearing loan from URW SE. The principal amount of the loan is €35.8 Mn as at December 31, 2023
(December 31, 2022: €35.8 Mn). The loan was amended in 2023, the new fixed interest rate is 5.1% (December 31, 2022: 1.44%) and the new
maturity date is May 31, 2028 compared to the original maturity date of May 31, 2023.
During the period, URW NV had a EUR and USD current account facility with URW SE for €185.0 Mn and $100.0 Mn, respectively. As at December
31, 2023, the drawn down amount are €134.2 Mn (December 31, 2022: €169.8 Mn) and $19.6 Mn (€17.8 Mn) (December 31, 2022: €64.3 Mn)
respectively. The credit facilities were amended with effective date December 31, 2023, the amended interest rate is EURIBOR 3 Months
(December 31, 2022: EURIBOR+ 0.85%) for the EUR facility and SOFR +1.4% margin before April 1, 2024 and +1.58% on or after April 1, 2024
(December 31, 2022: LIBOR + 1.4%) for the USD facility. The amended maturity date for both contracts is April 1, 2028 (December 31, 2022: April
1, 2024).
Total charges and premiums on issues of borrowings with URW SE amounts €0.1 Mn as at December 31, 2023 (December 31, 2022: €1.4 Mn).
FINANCIAL INSTRUMENTS
The Group has exposure to the following risks from its use of financial instruments:
• Credit risk
• Liquidity risk
• Market risk
In the notes 8.5 and 14.1 of the consolidated financial statements, information is included about the Group’s exposure to each of the above
risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital.
These risks, objectives, policies and processes for measuring and managing risk, and the management of capital apply also to the company only
financial statements of URW NV. Further quantitative disclosures are included below.
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FAIR VALUE
The fair values of most of the financial instruments recognised on the statement of financial position, including cash at bank and in hand and
current liabilities, is approximately equal to their carrying amounts.
The carrying amount and fair value of fixed interest rate borrowings and financial liabilities are as follows:
(€ thousands)
December 31, 2023
December 31, 2022
Carrying value
Fair value
Carrying value
Fair value
€543.7 Mn debt to URW SE
55,390
50,129
543,677
514,032
€750 Mn debt to URW SE
(1)
477
477
429
429
€500 Mn debt to URW SE
(2)
298
298
276
276
€250 Mn debt to URW SE
(3)
128
128
128
128
€500 Mn debt to URW SE
(4)
245
245
-
-
€35.8 Mn debt to URW SE
35,800
37,316
35,800
35,406
TOTAL
92,338
88,593
580,310
550,271
(1) The interest-bearing loan of €750.0 Mn with URW SE was converted on December 29, 2020, into a capital security with a maturity in 99 years and limited default opportunities.
(2) A part (€500.0 Mn) of the loan with an original nominal value of €1,250 Mn, has been converted into a capital security with a 99-year maturity as per June 30, 2021 with limited default
opportunities.
(3) An additional part (€250 Mn) of the loan with an original nominal value of €1,250 Mn, of which already €500 Mn has been converted earlier, has been converted into a capital security with a 99-
year maturity as per December 31, 2022 with limited default opportunities. Reference to 2.2.2
(4) €500 Mn of the loan with an original nominal value of €1,250 Mn, of which already €750 Mn has been converted earlier, has been converted into a capital security with a 99-year maturity as per
December 31, 2023 with limited default opportunities. Reference to 2.1.3.
The fair value of the Company’s interest bearings loans is estimated by discounting future cash flows using rates that approximate the Company’s
borrowing rate at the balance sheet date, for debt with similar maturity, credit risk and terms.
NOTE 9 ● DERIVATIVES
(€ thousands)
December 31, 2022
Fair value adjustments of
derivatives
(1)
Acquisitions/
Disposals
December 31, 2023
Assets
Derivatives at fair value non-current
142,648
6,015
(117,940)
30,723
• Fair value hedge
142,648
6,015
(117,940)
30,723
Liabilities
Derivatives at fair value non-current
(45,394)
13,489
-
(31,905)
• Fair value hedge
(45,394)
13,489
-
(31,905)
NET
97,254
19,504
-
(1,182)
(1) This amount includes the currency translation of -€300k, reference to note 8.4 Derivative instruments.
In the year ended December 31, 2023, URW NV has interest rate swaps and caps contracts with URW SE to minimise the interest risk on the Group
debt. URW SE has these contracts with third parties and these contracts are mirrored to URW NV with the same nominal amount, interest rate
and duration. The maturity date of the swaps is September 2028.
NOTE 10 ● OTHER LIABILITIES
(€ thousands)
December 31, 2023
December 31, 2022
Penalty on loan conversion
12,500
5,386
Payable due to URW SE
-
50,503
(1)
Payable due to group companies
2,643
1,343
Tax and social security liabilities
205
164
Other liabilities
7,221
808
Accruals
201
467
TOTAL
22,770
58,671
(1) This amount includes the loan of
€
35.8 Mn reclassified in the year ended December 31, 2022, from long term debt from URW SE. Reference to note 8 of company only.
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NOTE 11 ● ADMINISTRATIVE EXPENSES
(€ thousands)
2023
2022
Wages and salaries
553
504
Social security charges
133
127
Pension charges
46
42
Audit and advisory fees
814
729
Office costs
116
109
Other general costs
694
624
Depreciation charge
11
9
Abortive purchase cost
2,683
1,807
TOTAL
5,050
3,951
During the 2023 financial year, the average number of staff employed by the Company amounted to 5 (2022: 5). None were employed outside
the Netherlands.
NOTE 12 ● FINANCIAL RESULT
FINANCIAL INCOME
(€ thousands)
2023
2022
Interest income on caps and swaps
(1)
42,712
45,195
Fair value of derivatives
19,833
530,281
TOTAL
62,545
575,476
FINANCIAL EXPENSES
(€ thousands)
2023
2022
Interest expense on caps and swaps
(1)
(40,572)
(58,432)
Interest on borrowings
(23,785)
(21,757)
Expenses on borrowings
(13,102)
(6,479)
(1)
USD foreign exchange loss
(1,556)
(2,488)
Result on unwinding of swaps
(4,907)
-
Fair value of derivatives
-
(64,933)
TOTAL
(83,922)
(154,089)
1) Prior year figure was restated from Interest on borrowings to Expenses on borrowings for an amount of
€
5.4 Mn to align with the 2023 disclosure.
NOTE 13 ● INCOME TAX
The Company qualifies as a FII (Fiscal Investment Institution (in Dutch: Fiscale Beleggings Instelling)) for the corporate income tax in the
Netherlands in accordance with section 28 of the Dutch “Wet op de vennootschapsbelasting 1969”. The corporate tax rate of an FII is 0% in the
Netherlands, presuming all relevant conditions are met. Based on the FII regime, the Company is obliged to distribute dividends to its
shareholders, which dividends are, broadly said, based on its Dutch fiscal income.
NOTE 14 ● RESULT FROM SUBSIDIARIES
The result from subsidiaries after tax is -€585.3 Mn (December 31, 2022: -€572.0
50
Mn) which relates mainly to the result of the subsidiary URW
WEA LLC (formerly WFD America Inc.)
50
This amount was restated from what was disclosed in 2022: -€642.3, in 2022 the amount was note updated after the restatement of NCI.
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NOTE 15 ● AUDIT FEES
Fees charged by Deloitte (Netherlands) and its member firms to the Company as well as Ernst and Young Accountants LLP (Netherlands), its
subsidiaries and other consolidated companies for the 2023 services are specified as follows:
| 2023 | |||||||
Deloitte | Ernst & Young | Other Deloitte | Other EY | Other PWC | |||
Netherlands | accountants | Network | Network | network | |||
LLP | |||||||
(€ thousands) | (Netherlands) | 2023 | |||||
| Audit or limited review of the consolidated financial | 507 | 38 | 1,520 | 122 | - | ||
statements (1) | 2,187 | ||||||
Other assurance services (2) | 162 | 27 | - | - | 31 | 221 | |
Non- audit services (3) | - | - | - | 612 | 279 | 891 | |
TOTAL | 669 | 65 | 1,520 | 734 | 310 | 3,300 |
(1) The controlled companies correspond to the fully consolidated companies as well as the jointly controlled companies.
(2) The amounts correspond to comfort and consent letters issued in connection with bond issuances of the Group as well as the valuation report on Westfield trademark.
(3) The amounts correspond to tax related procedures in the US.
| 2022 | |||||
Deloitte | Ernst & Young | Other Deloitte | Other EY | ||
Netherlands | accountants LLP | Network | network | ||
(€ thousands) | (Netherlands) | 2022 | |||
Audit or limited review of the consolidated financial statements (1) | 448 | 191 | 2,061 | 167 | 2,867 |
Other assurance services (2) | - | 23 | - | - | 23 |
Non- audit services (3) | - | - | - | 1,151 | 1,151 |
TOTAL | 448 | 214 | 2,061 | 1,318 | 4,041 |
(1) The controlled companies correspond to the fully consolidated companies as well as the jointly controlled companies.
(2) The amounts correspond to comfort – and consent letters issued in connection with bond issuances of the Group.
(3) The amounts correspond to tax related procedures in the US.
NOTE 16 ● REMUNERATION OF THE MANAGEMENT BOARD AND THE
SUPERVISORY BOARD
The total remuneration of the members of the Board of Management over 2023 was €2,378,948 and for more details reference is made to chapter
2.3.2 of this annual report. The Supervisory Board received a total remuneration of €266,000 (paid to 2 out of 5 members) and for more details
reference is made to chapter 2.4.1 of this annual report. This remuneration as defined in Art 2:383 of the Dutch Civil Code, is paid by URW NV
or one of its subsidiaries.
NOTE 17 ● RELATED PARTIES
The Company is affiliated to URW SE, together they form URW. All Group entities are treated as related parties. Reference is made to note 7.4
in the consolidated financial statements.
NOTE 18 ● OFF BALANCE SHEET COMMITMENTS
General guarantees as defined in Art. 403, Book 2 of the Dutch civil code have been given by the Company to the subsidiary WFD UR RE BV. For
intercompany financial guarantees issued by the Company, there is no expected default and therefore the financial guarantees are not
recognised.
Together with the Dutch subsidiary WFD UR RE BV, the Company forms a fiscal unity for the value-added tax.
As from June 28, 2018, URW SE and the Company have implemented cross guarantees. The Company as part of the “Unibail-Rodamco Guarantors”
has jointly and severally agreed to guarantee the payment of all sums payable from time to time under the outstanding guaranteed senior notes
issued by certain subsidiaries of the former Westfield Corporation (WEA Finance LLC, Westfield UK & Europe Finance PLC and WFD Trust).
The Company has no significant off balance sheet commitments as at December 31, 2023.
99
NOTE 19 ● SUBSEQUENT EVENTS
Please refer to note 17 of the consolidated financial statements.
Schiphol, March 27, 2023
Management Board Supervisory Board
D. Lowe J.M. Tritant
G. Sieben C. Pourre
A. Taireh
F. Mouchel
J.L. Laurens
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3.5 OTHER INFORMATION
3.5.1 PROPOSED PROFIT APPROPRIATION
Under article 38.1 of the Company’s Articles of Association, the Management Board, with the approval of the Supervisory Board, shall determine
which part of the loss shall be added to the Company’s reserves, taking into account the fiscal rules and regulations applicable to the Company
from time to time. The remaining profits shall be at the disposal of the General Meeting.
3.5.2 STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO: THE SHAREHOLDERS AND THE SUPERVISORY BOARD OF UNIBAIL-RODAMCO-WESTFIELD N.V.
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2023 INCLUDED IN THE ANNUAL REPORT
OUR OPINION
We have audited the financial statements 2023 of Unibail-Rodamco-Westfield N.V., based in Amsterdam. The financial statements comprise the
consolidated financial statements and the company financial statements.
In our opinion:
• The accompanying consolidated financial statements give a true and fair view of the financial position of Unibail-Rodamco-
Westfield N.V. as at 31 December 2023, and of its result and its cash flows for 2023 in accordance with International Financial
Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
• The accompanying company financial statements give a true and fair view of the financial position of Unibail-Rodamco-Westfield
N.V. as at 31 December 2023, and of its result for 2023 in accordance with Part 9 of Book 2 of the Dutch Civil Code.
The consolidated financial statements comprise:
1. The consolidated statement of financial position as at 31 December 2023.
2. The following statements for 2023: the consolidated income statement, the consolidated statements of comprehensive income,
changes in equity and cash flows.
3. The notes comprising material accounting policy information and other explanatory information.
The company financial statements comprise:
1. The company balance sheet as at 31 December 2023.
2. The company profit and loss account for 2023.
3. The notes comprising a summary of the accounting policies and other explanatory information.
BASIS FOR OUR OPINION
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are
further described in the 'Our responsibilities for the audit of the financial statements' section of our report.
We are independent of Unibail-Rodamco-Westfield N.V. in accordance with the EU Regulation on specific requirements regarding statutory audit
of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to
independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags-
en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INFORMATION IN SUPPORT OF OUR OPINION
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The
following information in support of our opinion was addressed in this context, and we do not provide a separate opinion or conclusion on these
matters.
MATERIALITY
Based on our professional judgement we determined the materiality for the financial statements as a whole at € 96 million. The materiality is
based on 1% of total assets. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for
the users of the financial statements for qualitative reasons.
We agreed with the supervisory board that misstatements in excess of € 4.8 million, which are identified during the audit, would be reported to
them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
SCOPE OF THE GROUP AUDIT
Unibail-Rodamco-Westfield N.V. is at the head of a group of entities. The financial information of this group is included in the consolidated
financial statements of Unibail-Rodamco-Westfield N.V.
Our group audit mainly focused on the significant group entity URW America Inc. and its subsidiaries, which make up 99% of both total assets and
rental income.
In establishing the overall group audit strategy and plan, we determined the type of work that needed to be performed at the components by
the group engagement team and by component auditors from other Deloitte Network firms.
101
Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at these
components so as to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the group
financial statements as a whole. For each component we determined whether we required an audit of their complete financial information or
whether other procedures would be sufficient.
The group engagement team directed the planning, reviewed the work performed by component auditors and assessed an discussed the results
and findings with component auditors.
The group consolidation, financial statements and disclosures are audited directly by the group engagement team in addition to the other
procedures where the group engagement team is responsible for.
By performing the procedures mentioned above at group entities, together with additional procedures at group level, we have been able to
obtain sufficient and appropriate audit evidence about the group's financial information to provide an opinion on the consolidated financial
statements.
AUDIT APPROACH FRAUD RISKS
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an
understanding of the entity and its environment and the components of the system of internal control, including the risk assessment process and
management's process for responding to the risks of fraud and monitoring the system of internal control and how the supervisory board exercises
oversight, as well as the outcomes. We refer to the enterprise risk framework and respective risk chapter 4 of the annual report in which the
general risk framework and risk assessment of the entity is described. In respect to fraud risks to section 4.2.2.5 A of the annual report for
management’s corruption, money laundering & fraud risk assessment.
We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, as well as among
others the code of conduct and whistle blower procedures. We evaluated the design and the implementation and, where considered appropriate,
tested the operating effectiveness, of internal controls designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud, misappropriation of
assets and bribery and corruption in close co-operation with our forensic specialists. We evaluated whether these factors indicate that a risk of
material misstatement due fraud is present.
We did not identify fraud risk factors with respect to revenue recognition. We have assessed the accuracy of gross rental income based on a test
of detail and analytical procedures on the tenancy schedule and linked the completeness to the property portfolio. Given the occupancy rate,
we were able to complete an assessment of the recorded gross rental income based on the substantive procedures performed using the tenancy
schedules and property portfolio.
We identified the following fraud risks and performed the following specific procedures:
Fraud risk How the fraud risk was addressed in the audit
Management override of controls
We presume a risk of material misstatement due to fraud related to
management override of controls. Management is in a unique position
to perpetrate fraud because of management’s ability to manipulate
accounting records and prepare fraudulent financial statements by
overriding controls that otherwise appear to be operating effectively.
Our audit procedures included, among others, the following:
We incorporated elements of unpredictability in our audit.
Elements could be amongst others, additional samples on specific
account balances (for example investment property). We also
added specific searches on new key words in our manual journal
entry testing.
We also considered the outcome of our other audit procedures and
evaluated whether any findings were indicative of fraud or non-
compliance.
We tested the appropriateness of journal entries recorded in the
general ledger and other adjustments made in the preparation of
the financial statements.
We considered available information and made enquiries of
relevant executives, directors (including legal, compliance and
regional management) and the supervisory board.
We evaluated whether the selection and application of accounting
policies by the Company, particularly those related to subjective
measurements and complex transactions, may be indicative of
fraudulent financial reporting. For significant transactions we have
evaluated whether the business rationale of the transactions
suggests that they may have been entered into to engage in
fraudulent financial reporting or to conceal misappropriation of
assets. As part of our audit procedures, we verified whether the
significant transactions should be considered related-party-
transactions.
We evaluated whether the judgement and decisions made by
management in making the accounting estimates included in the
financial statements indicate a possible bias that may represent a
risk of material misstatement due to fraud. Management insights,
estimates and assumptions that might have a major impact on the
financial statements are disclosed in note 3.2 of the financial
statements. We performed a retrospective review of management
judgements and assumptions related to significant accounting
estimates reflected in prior year financial statements. Valuation of
102
Fraud risk How the fraud risk was addressed in the audit
investment property (including investment property as included in
the investments in companies accounted for using the equity
method) is a significant area to our audit as the valuation is
inherently judgemental in nature, due to the use of assumptions
that are highly sensitive, any change in assumptions may have a
significant effect on the outcome given the relative size of the
investment property balance. Reference is made tot the section
‘Our key audit matters’.
We audited all the top-side journal entries through inspection of
supporting documentation.
We determined the completeness of the top-side journal entries by
comparing these to the entries recorded in the previous year and
considered if other information gathered during the audit indicated
incompleteness of topside entries.
Valuation of investment property
Valuation of investment property (including investment property as
included in the investments in companies accounted for using the
equity method) is a significant area to our audit as the valuation is
inherently judgemental in nature, due to the use of assumptions that
are highly sensitive, any change in assumptions may have a significant
effect on the outcome given the relative size of the investment
property balance. There is a possible fraud risk that judgement and
decisions made by management in making the accounting estimates
are possibly biased.
Reference is made to the section ‘Our key audit matters’ for our
performed audit procedures.
Risk of incorrect recognition of disposals of investment properties
In 2023 the Company sold multiple investment properties. Accurate
and complete recognition of these transactions is an important area of
emphasis in our audit. We pay specific attention to fraud risks in selling
properties, such as ABC transactions and kickback fees.
Our audit procedures included, among others, the following:
We have gained understanding of the disposal process and tested
design and implementation of Unibail-Rodamco-
Westfield N.V.’s
relevant controls relating to disposals.
We performed procedures on the sales transactions. We have
reconciled the recognized transactions to relevant supporting
documentation and determined accurate and complete recognition
of transaction results in the fiscal year.
We verified that the investment properties sold aren’t sold
immediately to a third party with a significant higher transaction
value.
In addition, we have analyzed the sales price of investment
property transactions in relation to the most recent valuation value
as determined by the external appraiser. If applicable we have
assessed reasonableness of considerations paid to intermediaries.
We evaluated whether the disclosures are in accordance with the
requirements of IFRS-EU relevant to the recognition of the sales of
investment properties.
This did not lead to indications for fraud potentially resulting in material misstatements.
AUDIT APPROACH COMPLIANCE WITH LAWS AND REGULATIONS
We assessed the laws and regulations relevant to the entity through discussion with the management board, reading minutes and reports of
internal audit.
We involved our forensic specialists in this evaluation.
As a result of our risk assessment procedures, and while realizing that the effects from non-compliance could considerably vary, we considered
the following laws and regulations: (corporate) tax law, the requirements under the International Financial Reporting Standards as adopted by
the European Union (EU-IFRS) and Part 9 of Book 2 of the Dutch Civil Code with a direct effect on the financial statements as an integrated part
of our audit procedures, to the extent material for the financial statements.
We obtained sufficient appropriate audit evidence regarding provisions of those laws and regulations generally recognized to have a direct effect
on the financial statements.
Apart from these, the entity is subject to other laws and regulations where the consequences of non-compliance could have a material effect on
amounts and/or disclosures in the financial statements, for instance, through imposing fines or litigation.
Given the nature of the entity's business and the complexity of these other laws and regulations, there is a risk of non-compliance with the
requirements of such laws and regulations. In addition, we considered major laws and regulations applicable to listed companies.
103
Our procedures are more limited with respect to these laws and regulations that do not have a direct effect on the determination of the amounts
and disclosures in the financial statements. Compliance with these laws and regulations may be fundamental to the operating aspects of the
business, to the entity's ability to continue its business, or to avoid material penalties (e.g., compliance with the terms of operating licenses and
permits or compliance with environmental regulations) and therefore non-compliance with such laws and regulations may have a material effect
on the financial statements. Our responsibility is limited to undertaking specified audit procedures to help identify non-compliance with those
laws and regulations that may have a material effect on the financial statements. Our procedures are limited to (i) inquiry of management, the
Supervisory Board, the Executive Board and others within the entity as to whether the entity is in compliance with such laws and regulations and
(ii) inspecting correspondence, if any, with the relevant licensing or regulatory authorities to help identify non-compliance with those laws and
regulations that may have a material effect on the financial statements.
Naturally, we remained alert to indications of (suspected) non-compliance throughout the audit.
Finally, we obtained written representations that all known instances of (suspected) fraud or non-compliance with laws and regulations have
been disclosed to us.
AUDIT APPROACH GOING CONCERN
The financial statements of Unibail-Rodamco-Westfield N.V. have been prepared on the basis of the going concern assumption. As indicated in
the responsibilities of management below, management is responsible for assessing the entitiy’s ability to continue as a going concern. We
refer to the section ‘Going concern’ in Note 4.1.5 to the consolidated financial statements, which discloses that the entity’s liquidity needs for
the next 12 moths are covered by the available undrawn credit lines and cash on-hand as well as by the cross-gurantees granted within the
URW Group.
Our evaluation of management’s assessment of the entity’s ability to continue as a going concern for the next 12 months included the following
procedures:
• We inquired the management regarding any knowledge of events or conditions beyond the period of the management’s assessment.
• Sensitivity analyses of the client indicate that material breaches of covenants are unlikely to result in an early repayment obligation
based on current market circumstances and head room in the respective covenants. We evaluated the sensitivity analyses and the
impact on the going concern assumption. We did not indicate any hard material breaches.
• We have evaluated whether cash positions, undrawn credit lines and cash flows are expected to be sufficient to meet future
obligations.
• We have evaluated whether the tenant mix leads to concerns over dependency on a single tenant or limited group of tenants in
respect to the rental income and respective cash flows.
• In our evaluation of management’s assessment, we have considered all relevant information of which we are aware as a result of
the audit.
Our audit work did not result in contradictory information about management’s assessment of the entity’s ability to continue as a going
concern.
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OUR KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We
have communicated the key audit matters to the supervisory board. The key audit matters are not a comprehensive reflection of all matters
discussed.
Key audit matter How the key audit matter was addressed in the audit
Valuation of investment property (under construction), including investment property (under construction) as included in the
investments in the companies accounted for using the equity method.
Refer to note 6.1.2 and note 7.2 to the consolidated financial
statements.
As at 31 December 2023, Unibail-Rodamco-Westfield N.V. held a direct
portfolio of investment property with a fair value of EUR 4,217.4
million (31 December 2022 EUR 4,893.5 million) and an indirect real
estate portfolio with a fair value of EUR 4,798.2 million (31 December
2022 EUR 5,848.3 million) based on Unibail-Rodamco-Westfield N.V.’s
share as included in the investments in the companies accounted for
using the equity method.
The portfolio mainly consists of Shopping Centres.
At the end of each reporting period, Management determines the fair
value of its investment property portfolio in accordance with the
requirements of IAS 40 and IFRS 13.
Unibail-Rodamco-Westfield N.V. uses external valuation reports issued
by external independent professionally qualified valuers to determine
the fair value of the investment property.
As the valuation of investment property is inherently judgemental in
nature, due to the use of assumptions that are highly sensitive, any
change in assumptions may have a significant effect on the outcome
given the relative size of the investment property balances.
The most significant assumptions and parameters involved, given the
sensitivity and impact on the outcome, are the capitalization rate,
market rental income and market-derived discount rate.
IFRS 13 seeks to increase consistency and comparability in fair value
measurements and related disclosures through a ‘fair value hierarchy’.
The hierarchy categorizes the inputs used in valuation techniques into
three levels. The hierarchy gives the highest priority to (unadjusted)
quoted prices in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs. (Unobservable) inputs are
used to measure fair value to the extent that relevant observable
inputs are not available, thereby allowing for situations in which there
is little, if any, market activity for the asset at the measurement date.
Fair value measuremens categorized within Level 3 have the lowest
priority as the valuation is predominantly based on unobservable
inputs and those measurements have a greater degree of uncertainty
and subjectivity. This means that a valuation at Level 3 has a fairly
large measure of estimation uncertainty and as a result a fairly large
bandwith of valuation uncertainty in which a valuation can been seen
reasonable in the light of IFRS 13.
Our audit procedures included, among others, the following:
We have gained understanding of the valuation process and tested
design and implementation of Unibail-Rodamco-
Westfield N.V.’s
relevant controls with respect to the data used in the valuation of
the property portfolio.
We noted that management involved established international
parties to assist with the valuation of the investment properties.
We evaluated the competence of Unibail-Rodamco-Westfield N.V.’s
external appraiser, which included consideration of their
qualification and expertise.
In relation to the significant assumptions in the valuation of
investment property (under construction), we have:
• Determined that the valuation methods as applied by
Management, as included in the valuation reports, are
appropriate and consistent.
• We have challenged the significant assumptions used
(such as capitalization rate, market rental income,
market-derived discount rate) against relevant market
data. We have involved our internal real estate
valuation experts in these assessments.
• We assessed the sensitivity analysis on the key input
data and assumptions to understand the impact of
reasonable changes in assumptions on the valuation and
other key performance indicators.
• We have assessed the appropriateness of the disclosures
relating to the assumptions used in the valuations and
sensitivity analysis in the notes to the consolidated
Financial Statements.
Observation
We found that, with the (significant) assumptions used in the
valuation reports, the valuation of the investment property is
valued within a reasonable range in the light of the valuation
uncertainty for level 3 valuations.
Valuation (including impairment testing) of acquired intangible assets
Refer to note 6.3 to the consolidated financial statements.
As at 31 December 2023, Unibail-Rodamco-Westfield N.V. held a total
of EUR 248,4 million intangible assets (31 December 2022 EUR 211,2
million) of which EUR 241,9 million relates to the Westfield Trademark
for flagship center’s (31 December 2022 EUR 205,8 million).
The subsequent measurement of acquired intangible asserts with an
indefinite useful life requires annual impairment testing which is
complex and subject to estimation uncertainty. During 2023, an
impairment of EUR 44,2 million have been reversed.
Trademark intangible assets are valued by independent external
appraisers using a 10 years Discounted Cash Flow methodology
combined with the Royalty Relief method. The value relies on
incremental growth attributable to the Westfield Trademark
multiplied b
y the royalty rate. The Relief from Royalty method
estimates the value of the asset as the present value of future royalty
Our audit procedures included, among others, the following:
•
We obtained an understanding of an evaluated the
design of controls over the Company’s impairment
testing process with regard to intangible assets with an
indefinite useful life, including controls over
management’s review of the significant assumptions.
•
We noted that management involved established
international parties to assist with the valuation of the
trademark
• We evaluated the competence of Unibail-Rodamco-
Westfield N.V.’s external appraiser which included
consideration of their qualification and expertise.
•
We inspected the documentation regarding the
impairment analysis that the Company prepared with
the assistance of an external appraiser.
•
With the assistance of our valuation specialists, we
assessed the valuation of the intangible assets. We
reviewed management’s key assumptions used in the
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Key audit matter How the key audit matter was addressed in the audit
payments over the life of the asset that are saved (not paid) by virtue
of owning the asset.
Under IAS 36 an asset is impaired when it carrying amount exceeds its
recoverable amount. The recoverable amount of an asset or a cash-
generating unit is the higher of its fair value less costs of disposal and
its value in use. For the assessment of both recoverable amount and
fair value a large level of valuation uncertainty is included. Beside
uncertainty inherent in the assets both assessments include
uncertainty on timing of cashflows, the height of the cashflows,
discount rates, etc. Furthermore, it is
uncertain whether the
assumptions of the market or the enterprise are more likely to be true.
As perfect markets do not exist for many of the assets within the scope
of IAS 36 and its is unlikely that predictions of the future will be
entirely accurate, regardless of who makes them. This means that the
outcome of the assessment has a fairly large measure of estimation
uncertainty and as a result a fairly large bandwith of valuation
uncertainty in which a valuation can been seen reasonable in the light
of IAS 36 and IFRS13 (Level 3).
Therefore, combined with the significance of the balances to the
financial statements as a whole, the valuation (including impairment
testing) of acquired intangible assets is a key audit matter.
valuation such as long-term growth rate, incremental
growth rate, discount rate, as well as the sensitivity
analysis resulting from variations of these assumptions.
•
We assessed the used business assumptions with
historical data.
• We have assessed the appropriateness of the disclosures
relating to the assumptions used in the notes to the
consolidated financial statements.
Observation
We found that, with the (significant) assumptions used in the
valuation, the valuation of the intangible assets is valued within a
reasonable range in the light of the valuation uncertainty under IAS
36 and IFRS 13.
Accounting for financial liabilities including derivatives
As at December 31, 2023, Unibail-Rodamco-Westfield N.V. had total
liabilities of EUR 9.343,4 million, including bonds and notes, bank
borrowings, other financial liabilities and financial leases and
commitments to non-controlling interests.
The preference shares held by URW SE amount to EUR 510,3 million
and are valued at amortized costs. Other commitments to non-
controlling interests are valued at fair value. Financial covenants are
applicable to issued bonds (EUR 3.646,5 million).
The company uses interest rate swaps to hedge its exposure to interest
rate risk. These derivatives, for which no hedge accounting is applied,
are carried at fair value through profit or loss and have a carrying
amount at the balance sheet of respectively EUR 32,8 million (asset)
and EUR 31,9 million (liability).
The fair value adjustments of derivatives amount to EUR 19,6 million
positives.
The valuation of these financial instruments is dependent on estimates
and assumptions and requires judgement by management.
Furthermore, the Company amended an additional part (EUR 500
million) of the loan with an original nominal value of EUR 1,250 million
with Unibail-Rodamco-Westfield SE, which triggered as assessment of
the classification of the modified loans as either equity or long-term
borrowings.
Besides, the company amended the loans which are classified as long-
term borrowings with Unibail-Rodamco-Westfield SE on interest rate
and extended the maturity date.
Considering the estimation uncertainty regarding the valuation of
financial instruments at fair value, the importance and relative size of
external financing, compliance with covenant, and the complex
accounting related to the additional amended part (EUR 500 million)
of the EUR 1,250 million intragroup loan, the accounting for financial
liabilities including derivatives is an important area of emphasis in our
audit.
Please refer to note 2.1.3 and note 8 of the consolidated financial
statements.
Our audit procedures included, among others, the following:
•
We obtained and analyzed loan contracts and loan
amendments including the amended EUR 500 million
intragroup loan, on a sample basis to understand the
terms and conditions and verified that those
characteristics were correctly reflected in the financial
statements in accordance with the accounting policies
applied by the Company based on IAS 32 Finnancial
Instruments presentation and IFRS 9 Financial
Instruments.
• We performed analytical procedures on the financial
expenses.
• We confirmed the amount of the principal debt with
third parties on a sample basis.
• We confirmed a selection of derivatives directly with
counterparties and performed procedures to ensure
completeness of them.
• For a sample of financial instruments, we reviewed the
valuation of derivatives
(including the DVA/CVA
calculation) and we involved our internal specialists
who performed independent valuations.
•
Where debt covenants were identified, we assessed
management’s calculations to verify compliance with
these covenants.
• Additionally, we considered the appropriateness of the
IFRS7 disclosures in the financial statements in respect
of financial liabilities including derivatives.
Observation
Applying the materiality, we have
audited the accounting for
financial liabilities including derivatives as well as the related
disclosures in notes 8.3.3., 8.3.7 and 8.4 and have no reportable
findings.
REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
The annual report contains other information, in addition to the financial statements and our auditor's report thereon.
The other information consists of:
• Management Board's Report.
• Other Information as required by Part 9 of Book 2 of the Dutch Civil Code.
• Corporate governance and remuneration report.
• Risk factors.
• Information on the Company, shareholding and the share capital.
106
Based on the following procedures performed, we conclude that the other information:
• Is consistent with the financial statements and does not contain material misstatements.
• Contains all the information regarding the management report and the other information as required by Part 9 of Book 2 of the
Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or
otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The
scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
Management is responsible for the preparation of the other information, including the Management Board's Report in accordance with Part 9 of
Book 2 of the Dutch Civil Code, and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS AND ESEF
Engagement
We were engaged by the supervisory board as auditor of Unibail-Rodamco-Westfield N.V. on June 22, 2022, as of the audit for the year 2022 and
have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory
audit of public-interest entities
European Single Electronic Format (ESEF)
Unibail-Rodamco-Westfield N.V. has prepared its annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU)
2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on
ESEF).
In our opinion, the annual report, prepared in XHTML format, including the (partly) marked-up consolidated financial statements, as included in
the reporting package by Unibail-Rodamco-Westfield N.V. complies in all material respects with the RTS on ESEF.
Management is responsible for preparing the annual report including the financial statements in accordance with the RTS on ESEF, whereby
management combines the various components into one single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS
on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N 'Assurance-opdrachten inzake het voldoen aan de
criteria voor het opstellen van een digitaal verantwoordingsdocument' (assurance engagements relating to compliance with criteria for digital
reporting).
Our examination included amongst others:
• Obtaining an understanding of the company's financial reporting process, including the preparation of the reporting package.
• Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing
and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:
o obtaining the reporting package and performing validations to determine whether the reporting package
containing the Inline XBRL instance and the XBRL extension taxonomy files has been prepared in accordance with
the technical specifications as included in the RTS on ESEF;
o examining the information related to the consolidated financial statements in the reporting package to determine
whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.
DESCRIPTION OF RESPONSIBILITIES REGARDING THE FINANCIAL STATEMENTS
Responsibilities of management and the supervisory board for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book
2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable
the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, management is responsible for assessing the company's ability to continue as a going
concern. Based on the financial reporting frameworks mentioned, management should prepare the financial statements using the going concern
basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do
so.
Management should disclose events and circumstances that may cast significant doubt on the company's ability to continue as a going concern in
the financial statements.
The supervisory board is responsible for overseeing the company's financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our
opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud
during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and
extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
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We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch
Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:
• Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing
and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.
• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Concluding on the appropriateness of management's use of the going concern basis of accounting, and based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or
conditions may cause the company to cease to continue as a going concern.
• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures.
• Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this
respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or
the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out
on the complete set of financial information or specific items.
We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant findings in internal control that we identified during our audit. In this respect we also submit an additional
report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-
interest entities. The information included in this additional report is consistent with our audit opinion in this auditor's report.
We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the supervisory board, we determine the key audit matters: those matters that were of most significance
in the audit of the financial statements. We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.
Amsterdam, March 19, 2024
Deloitte Accountants B.V.
Signed by J. Holland
108
RISK FACTORS
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4.1 ENTERPRISE RISK MANAGEMENT (“ERM”) FRAMEWORK
4.1.1 POLICY & ORGANISATION
Unibail-Rodamco-Westfield N.V. (“URW NV”) and its subsidiaries are together referred to as “the Group”. URW NV and its controlled subsidiaries
are affiliated to Unibail-Rodamco-Westfield SE (“URW SE”). Together they form the URW Group. Unless stated otherwise, the ERM framework of
URW NV is aligned with that of the URW Group.
URW NV’s Risk Management Policy is designed to:
• Identify and analyse the main potential threats in order to anticipate risks proactively;
• Set up and implement appropriate mitigating measures in order to monitor and/or reduce the identified risks;
• Secure decision-making and Group processes to achieve business objectives;
• Create and preserve the Group’s value, assets, brand and reputation;
• Ensure consistency of decisions with the Group’s values and strategy; and
• Bring the Group’s staff together behind a shared vision of risk management.
The organisation of the Group can be defined as a matrix organisation within the Netherlands and the United States and a Corporate Centre
organised around four main functions i.e. Owner, Operator, Resourcer, and Financer. The decision-making process is accomplished through
committees and collegial decision-making. The segregation of duties within the Group is based on the separation between execution and control.
The Group does not outsource core activities, except for some parts of its IT system and facility management. The Group’s main activities are
Investment and divestment, Asset management, Operating management (including leasing and property management) and Refurbishments, which
are briefly described below. The organisational structure is also based on a set of delegations that define the responsibilities and level of authority
of managers. Moreover, the Group utilises internal committees, where decisions are based on a risk analysis approach.
INVESTMENT/DIVESTMENT
Investment is one of the major processes at URW NV as it is one of the first steps in the value creation process. It starts with deal sourcing (the
search for market opportunities), which is based on brokers, off- market relationships, and connections with local communities. Once an
investment opportunity is identified it undergoes a strict review and approval procedure with multiple steps through compliance and demanding
internal decision-making processes, in alignment with URW NV’s investment strategy.
Under the supervision of the Chief Operating Officer US (“COO US”), the Investment/Divestment (“I/D”) Department is responsible for the value
creation process and is in charge of evaluating and advising periodically on the basis of the aforementioned information whether the property
needs to be disposed of or not.
For divestments, a highly structured process is in place to provide the most complete and accurate information (data room) to maximise the
selling price and minimise the guarantees and representations, as well as the potential liabilities.
ASSET MANAGEMENT
Under the responsibility of the COO, this activity focuses on value creation in URW NV’s asset portfolio and consists of defining the strategy for
each asset (5-year business plan). In line with the contract terms and conditions, the Accounting department invoices and collects the rents and
pays expenses related to the management of the building.
OPERATING MANAGEMENT
Under the responsibility of the COO, this activity focuses on value creation in URW NV’s asset portfolio and consists of defining the strategy for
each asset (5-year business plan). In line with the contract terms and conditions, the Accounting department invoices and collects the rents and
pays expenses related to the management of the building.
CONSTRUCTION/REFURBISHMENT
Construction and refurbishment consist of the following activities:
• Control of construction costs and management of construction contracts;
• Definition of the URW Group sustainability policy for development;
• Selection and monitoring construction and refurbishment companies; and
• Supervision of construction until grand opening.
Investment /
Divestment
Asset
Management
Operating
Management
Construction /
Refurbishment
Finance
Risk Management
Legal & Compliance
Information Technologies System
Resources
Sustainability
Internal
Audit
110
4.1.2 OVERVIEW OF URW NV RISK COMMITTEE’S RESPONSIBILITIES
Since the completion of the Westfield transaction in June 2018, the Enterprise Risk Management (“ERM”) framework has continued to evolve. All
key risks have been reviewed and assessed internally, and action plans for improvement have been established. Fifteen identified key risks were
presented to and reviewed by the Audit Committee and Supervisory Board (“SB”) in 2023 through a bi-annual (half-year and full-year) assessment.
Our ERM framework focuses on:
• Risks inventory;
• Risk control methodology; (including monitoring of appropriate mitigating measures and action plans);
• Risk mapping;
• Governance; and
• Functional organisation.
URW NV has a robust Risk Management programme, providing reasonable assurance on levels of control. It remains oriented towards ongoing and
continuous risk assessment and improvement in controls.
Management of risk measures and follow-up of effective implementation of yearly action plans are core to the Group’s business resilience, and
are reviewed and challenged on a recurring basis.
Below is an illustration of key ERM responsibilities.
OVERVIEW OF ERM KEY RESPONSIBILITIES
Governance continues to enhance and support the importance of ERM by establishing oversight responsibilities. URW has worked on the alignment
and coherence of the Risk Management governance bodies, considering market best practices, regional and sector benchmarks and market
investors’ expectations.
On December 6, 2018, upon the recommendation of the Audit Committee (“AC”), the SB approved the current Risk Management framework.
111
The URW NV ERM framework has three lines of defence as follows
51
:
(*) NV included in URW Group Consolidated Risk Report
(**) URW Group Risk Committee consolidates URW NV risk report
Central to the URW NV ERM Framework is the URW NV Risk Management Committee (“RMC”). Composed primarily of senior executives from the
Netherlands and the US, it oversees management of fifteen key risks across the portfolio (“Risk Inventory”).
The Risk Inventory is organised into the following five categories:
(1) Business Sector and Operational Risks,
(2) Financial and Tax Risks,
(3) Environmental and Social Responsibility Risks (CSR) –emphasis on Sustainability,
(4) Security and Health & Safety, and
(5) Legal and Regulatory.
The responsibilities of the RMC include:
• Supporting the development of a risk culture within the region, promoting open discussion regarding risk and integrating Risk
management into the organisation and among employees;
• Monitoring effective implementation of identified mitigating measures and action plans;
• Providing input to management regarding the URW NV platforms’ risk appetite and tolerance;
• Embedding ERM in all activities within the business;
• Discussing the identification and evaluation of risks with local risk owners;
• Supporting improvement in risk control, management measures and monitor action plans;
• Reviewing risk initiatives against the URW Group’s Compliance Book to align assessment and establish training priorities;
• Remaining aware of any material evolution of an existing risk or any new or emerging risk; and
• Providing validation in preparation for review by the URW Group Risk Committee (“URW GRC”).
The current members of the RMC are:
• Chief Operating Officer US (“COO US”) as the Chair;
• Chief Financial Officer URW NV (“CFO URW NV”);
• Chief Financial Officer US (“CFO US”);
• General Counsel US;
• VP of Organisational and Business Transformation and Internal Audit US;
• EVP Center Operations & Construction Management US;
• URW Group Director of Security, Risk & Crisis Management;
• Senior Litigation and Compliance Counsel US (as moderator);
• Head of Risk Management Europe (as a guest if requested); and
• Others Local Risk Owners if requested.
51
Overview of the lines of defence comports with COSO (Committee of Sponsoring Organisations) ERM standards.
2
ND
LINE OF DEFENCE
3
RD
LINE OF DEFENCE
URW N.V. Supervisory Board
URW N.V. Risk Committee
Executive committee
URW N.V. Management
Board
URW N.V.
Audit Committee
Internal audit
Group or support
functions
(Communication,
Redevelopment, Finance,
Resources etc.)
Risk Management and
Compliance
1
ST
LINE OF DEFENCE
Local Risk
Owners &
Managing
Functions
112
The RMC liaises with the Local Risk Owners to accomplish the ERM goals. The Local Risk Owners are department heads assigned to manage and
monitor one or more risks from the Risk Inventory. They rate the risks in terms of Impact, Likelihood, and Level of Control pursuant to a Risk
Assessment Criteria biannually.
The primary responsibility of the URW NV Risk Management Committee is to oversee and approve the Group-wide risk mapping and key
management measures and to assist the Management Board (“MB”) in:
• Establishing that all executive teams have identified and assessed the risks that the Group faces and established a risk management
system to address those risks;
• Validating the level of control over a given risk and, in conjunction with the MB and/or other internal committees, validating that
such risks are in line with the Group’s Risk strategy;
• Ensuring that the division of risk-related responsibilities for each risk owner is clearly defined, and that risk owners are routinely
performing risk assessments and gap analysis to maintain awareness of all risks; and
• Elevating to the MB and SB any emerging and developing risks.
To fulfil its responsibilities and duties, the RMC:
• Supports the development of a risk culture within the Group, promotes open discussion regarding key risks, integrates risk
management into the organisation’s objectives and compensation structure, and creates a corporate culture such that people at
all levels manage risks rather than ignoring them or accepting them without proper risk analysis;
• Provides input to management and the Executive Committee regarding the Group risk appetite and tolerance;
• Monitors the organisation’s risk profile (risk mapping); and
• Approves the Risk Management Policy and plan, which includes:
The Company’s risk management structure;
Standards and methodology applied to assess risks;
Risk management measures (risk management guidelines); and
Training and awareness programmes or information.
Feedback analysis on crises/incidents
The Risk Management Organisation reviewed the Group’s key risks and associated action plans in collaboration with risk owners.
A description of the key risks monitored by this internal control system is outlined below.
The RMC met twice in 2023. Its main achievements are:
• The review of URW NV’s risk mapping;
• Periodic “deep dive” risk reviews agreed with the AC chairperson and presented at the AC/SB meetings;
• The review and follow-up of action plans;
• The approval of business decisions with risk exposures; and
• Presentation of the key risk inventory and risk rating grid for AC/SB approval.
4.1.3 URW NV RISK APPETITE
URW NV’s risk appetite is embedded within its overall strategy and risk management framework. In general, URW NV has a conservative approach
to managing risk. For each risk category – (i) Business Sector & Operational, (ii) Financial & Tax, (iii) Environmental and Social Responsibility,
(iv) Security, Health & Safety, and (v) Legal & Regulatory – we continuously assess the adequacy of and seek to improve mitigating measures. We
also monitor and identify new, emerging, evolving risks. In turn, we implement additional measures to control those risks as appropriate.
BUSINESS SECTOR AND OPERATIONAL RISKS
The ongoing retail market evolution is a significant challenge to URW NV. To become an industry leader in such a disruptive environment, URW
NV has devised a strategy that focuses on the concept of creating landmark destinations. Leasing and operations are partnering with the most
sought-after brands and operators to offer experiences that transcend traditional retail shopping malls. Because significant risks are inherent in
taking steps toward adaptation and innovation, URW NV has put special emphasis on due diligence and risk analysis in its decision-making process.
Other key components of the strategy are divestment of underperforming assets and leveraging data analytics. With respect to the divestment
activity, URW NV’s approach is disciplined and designed to maximise the value of the transactions to URW NV. Regarding data analystics and
related information technology services, URW NV’s approach is proactive and robust to comply with the regulations and limit the threat of data
breaches and other cyber-related incidents.
FINANCIAL AND TAX RISKS
As a REIT (real estate investment trust), URW NV is subject to a complex regime of prescriptive and challenging tax rules. To maximise compliance
and minimise adverse financial and tax results, URW NV has a very conservative fiscal policy. This is also consistent with the capital-intensive
nature of the business and the importance of maintaining a good financial credit rating for access to funds at competitive interst rates.
SUSTAINABILITY RISKS
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Considering the size of its tangible assets portfolio, the URW Group places sustainability risks at the heart of its strategy with an integrated
commitment to make sustainability a core part of the URW Group business. The URW Group has developed a global sustainability strategy based
on environmental best practices, social fairness and transparent governance. The “Better Places” roadmap aims to address the main challenges
faced by the URW Group with its operational activities in all geographies. The environmental transition presents a significant opportunity for the
URW Group to create financial and social value.
Please note: As sustainability is embedded in the URW Group’s core business, other sustainability risks cut through the majority of the URW
Group risks and are mentioned throughout this chapter.
For information on the related sustainability policies, please refer to section 3.2 Sustainability Statement in th URW Group 2023 Sustainability
Report.
52
Previous terminology was Climate Change & Societal, now both covered under “Sustainability”.
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SECURITY AND HEALTH & SAFETY
With hundreds of millions of customers visiting URW NV’s centres annually, URW NV is keenly aware of the importance in providing a safe and
healthy shopping environment. URW NV is also keenly aware of the threat of terrorist events. URW NV dedicates significant resources to both
health & safety and security. However, even with the most strenuous loss prevention and crisis management programmes, the risk of loss from
these exposures will always be present. To protect URW NV from the potential negative financial impact associated with a significant terrorism
or life safety event a public liability insurance programme has been taken out in amounts sufficient to cover its exposure to this risk.
LEGAL AND REGULATORY
URW NV has a “zero tolerance” policy towards any bribery or corruption and requires full compliance with all applicable regulations and laws in
the jurisdictions in which it operates. Significant efforts are devoted to develop procedures for reporting, ongoing training, and compliance
programs to minimise any exposure associated with this risk.
4.1.4 INTERNAL CONTROL SYSTEM
The Group’s internal control system covers all of the Group’s activities and geographies. It is based on a set of principles that aims to provide
reasonable assurance that the following internal control objectives are met:
• Transactions are executed effectively and optimised;
• Protection of the Group’s assets;
• Financial information is reliable; and
• All operations comply with prevailing legislation, external regulations and URW NV’s internal rules.
The Group’s internal control system is in line with the general principles of the Internal Control System reference framework by the AMF (Autorité
des Marchés Financiers: the French financial market authority)
53
and is based on:
• A set of standardised procedures;
• Accountability of managers in charge of the business, finance and control;
• A committee-based, decision-making process for acquisitions, disposals, refurbishment/construction projects, and leasing; and
• Segregation of duties between execution and control.
The URW Group’s control environment detailed in the URW Compliance Book for Governance, Organisation & Corporate Rules describes:
• The URW Group organisation structure: a matrix organisation with a double reporting line at corporate and regional levels;
• Governance for URW NV and its subsidiaries;
• A framework of core processes and internal rules covering investment and divestment, leasing activities and support functions,
notably finance and human resources;
• A Code of Ethics, covering the URW Group’s core values and rules of conduct, with particular emphasis on ethical behaviour,
prohibition of corruption, conflicts of interests, confidentiality and transactions involving on URW Group Stapled Shares; and
• An Anti-Corruption Programme that includes, among other things, risk mapping, which has been fully reviewed in 2022 and a due
diligence process of business partners before entering into business relationships.
In addition to the URW Group Compliance Book, the Group’s control environment comprises:
• Job descriptions and an appraisal assessment system based on performance targets;
• A set delegation of authority, responsibility and limits that span all the Group’s activities;
• General and specific procedures applicable at corporate level and in the different regions where the Group is present; and
• Less formal instructions and recommendations that nevertheless form an integral part of the internal control system.
The URW Group Internal Audit Department, composed of 6 (2021:8) full-time employees in France and in the United States, assesses the internal
control system by conducting regular audits of all of the business units in line with the annual audit plan approved by the MB and the SB. In
addition, the URW Group CEO or the Chair of the AC can also ask the URW Group Internal Audit Department to carry out “flash” assignments in
order to provide a rapid response to urgent issues and/or the treatment of new risks or problems. Final audit reports are addressed to the MB
and to each department that has been involved in the audit. A summary of audit findings is provided to the AC on a quarterly basis.
The Group’s Internal Audit Charter sets out the different missions of the audit function. To ensure it remains genuinely independent, the URW
Group Internal Audit Department reports to the URW Group CEO and to the Chair of the AC.
A description of the main risks monitored by this internal control system are set out hereafter.
4.2 MAIN RISK FACTORS
In accordance with European Regulation No. 2017/1129 of June 14, 2017, on the prospectus to be published in the event of a public offering of
securities or with a view to the admission of securities to trading on a regulated market, risk factors presented, hereafter, are limited to specific
risks of the Group and remaining significant after application of the risk management measures.
Nevertheless, the risk factors discussed in this section are not exhaustive and there may be other risks, either potential unidentified or emerging/
developing identified risks, or risks not specific enough to the Group and/or of which the occurrence is not considered likely to have a material
adverse effect on URW, its operations, financial position and/or results, share price or guidance/outlook as at the date of filing of the Universal
Registration Document. In addition, given the geographical scope of URW activities, the potential impact of a same type of risk may differ from
one1 country to another.
The URW NV risk mapping is reviewed and updated, if necessary, on a recurring basis under the supervision of the URW GRC. The URW NV risk
mapping is discussed by the AC and the SB.
53
The AMF is also a reference for URW Group.
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Given the ongoing geopolitical and macro-economic conditions adding to the impactful post-pandemic legacy, and the threat of recession
looming, URW NV continues to monitor and anticipate the evolving impacts to the business, particularly concerning interest rates, inflation,
supply chain issues and its effects on consumption and financing and high volatility of financial markets.
The Group’s risk mapping and assessment process continually factors in potential changes linked to geopolitical and macro-economic conditions
which could have a significant effect on the Group’s business operations, its budgetary and earnings forecasts, as well as on its stated strategy.
4.2.1 RATINGS OF THE MAIN SPECIFIC RISK FACTORS
The risk inventory for URW NV is composed of 12 risks, which are organised into 5 general categories. They are presented below on a descending order of
materiality, first ones being the most material (impact and likelihood).
This rating is based on:
(i) The potential net impact corresponding to the potential (financial/legal/reputational) impact after risk management measures have been
put in place (net impact); and
(ii) The potential net likelihood of the risk event, after risk management measures have been put in place (net likelihood).
This rating, and specifically the likelihood, is the result of URW NV’s management assessment performed through the ERM framework described
in section 4.1.2 Overview of URW NV Risk Committee’s responsibilities and depends on the subjective assessments of management.
The risk rating criteria for net impact and net likelihood is regularly reviewed by the RMC and presented to the AC and SB in line with the Group’s
evolving risk appetite.
Rating
Net impact
High net impact Medium net impact Low net impact
Net likelihood
Likely Possible Unlikely
Risk Factors categories Risk Factors
Rating after
risk management measures
Section
Net impact
Net Likelihood
Category #1: Business Sector and
Operational risks
Retail Market Evolution/Disruption
4.2.2.1.A
Investment and Divestment
4.2.2.1.B
Refurbishment/Construction
4.2.2.1.C
Leasing & Commercial Partnerships
4.2.2.1.D
IT System & Data: Continuity and integrity
4.2.2.1.E
Category #2: Financial and Tax risks
Access to Capital & Financial Market disruption
4.2.2.2.A
REIT Status & Regime (Tax)
4.2.2.2.B
Category #3: Environmental and
Social Responsibility risks
Recruitment, Retention, and Succession
4.2.2.3.A
Sustainability risks
4.2.2.3.B
Category #4: Security, Health and
Safety risks
Terrorism & Major Security
4.2.2.4.A
Health and Safety (Including pandemic and natural
disasters)
4.2.2.4.B
Category #5: Legal, Regulatory risks
Legal, Regulatory & Fraud
4.2.2.5.A
4.2.2 DETAILED MAIN RISK FACTORS
4.2.2.1 CATEGORY #1: BUSINESS SECTOR AND OPERATIONAL RISKS
A. Retail Market Evolution/Disruption
As an operator of commercial assets, any mid- to long-term deterioration in economic conditions with implications for the leasing market and/or
investments may have a significant impact on the level of the Group’s activities, the value of its assets, its results and its investment and
development strategy.
As of December 31, 2023, URW NV’s portfolio of 18 Shopping Centres in the US, including 11 Flagships, was valued at €9,015.6 Mn (2022: €10,947
Mn)
54
. Considering its real estate profile and exposure, the Group’s results of operations and/or its core business strategy could be adversely
54
valuation incl. transfer taxes and the Westfield Trademark.
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affected by its inability to continue to lease space in its assets on economically favourable terms, to adapt its offer and customer experience to
new trends and expectations, or to develop and implement new business models, or by tenant default.
The pandemic effect has accelerated many retail sector evolutionary trends over the last 2-3 years. Some trends are likely to result in a
permanent shift in shopper buying habits and expectations. Changes in consumer trends and practices combined with a slowdown in the economy,
political instability, doubts on final resolution of the health crisis, reduction in available savings and stricter regulations have, or may have,
significant impact on the Group’s core business activities.
The evolving consumer habits and impacts of the current economic situation (potential drop in consumer confidence) require shopping centres
to increasingly adapt their offers and showcase their local and global footprint (both Westfield and URW brands).
Worldwide, the e-commerce business continues to grow. In 2023, retail e-commerce sales were estimated to exceed $5.7 trillion worldwide. This
figure is expected to reach new heights in the coming years
55
.
Despite this growth, e-commerce has not translated into the demise of brick-and-mortar retail. Rather, the emerging retail trend is an
omnichannel shopping experience that allows consumers to shop seamlessly from all points of contact, i.e., the channels web, mobile app, social
media, and brick and mortar. Retailers, including digital native brands, are opening physical stores to offer their customers an omnichannel
experience, which, according to an ICSC (International Council of Shopping Centres) study, can increase the retailer’s web traffic by as much as
45%.
The acceleration of sustainable consumption and energy sobriety are key drivers of global consumption and has led to increased consumer
expectations. This presents both challenges and opportunities for the Group’s operations and offerings. Sustainability is now a strong component
of the URW Group’s core business.
Global inflation is expected to fall from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, still above pre-pandemic (2017–2019) levels of about
3.5%
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. Continued high inflation increases the likelihood of tenant failures and ‘doubtful debtors’, and may adversely affect the consumption
power and, consequently, the global turnover of retailers. That could negatively impact the retailer’s capabilities to continue to invest into their
new concepts and in digital innovation and, as a consequence, negatively impact the attractiveness of their commercial offer. High inflation
rates in the countries where the Group operates may trigger some social tensions as well as retail market disruptions.
The value of the Group’s real estate assets (calculated using the fair value method) is sensitive to variations in the appraisers’ principal
assumptions (yield, rental value, occupancy rates) and is, therefore, subject to material variations that may impact the Group. The rental income
of some Group assets may depend on flagship stores/department stores and could suffer a material adverse impact if 1 or more of these tenants
were to terminate their leases, fall into bankruptcy or equivalent scheme, triggering financial impacts or fail to renew their leases, and/or their
location were considered to lack attractiveness, and/or in the event of consolidation between these retail sector companies.
The economic situation has evolved rapidly with the war in Ukraine and destabilisation in the Middle East, leading to continued uncertainty on
energy costs, inflation and interest rates. Nevertheless, despite all these challenges, the year 2023 showed a good resumption of activity in URW
NV’s assets.
In the US, 2023 footfall
57
58
increased compared to 2022, up +3.1%, exceeding 2019 levels.
Main Risk Factors
Main Risk Management Measures
• Continued evolution of the retail sector due to competition
from online retail as well as demographic and cultural changes.
Anchor department stores and many fashion retailers may
change their brick-and-
mortar strategies, including store
closures;
• Inability to adapt to quickly changing shopper and retailer
preferences, office and convention exhibition patterns and
preferences, could negatively impact achieving leasing and
revenue targets which could have an adverse impact on overall
Group financial results;
• URW’s current strategy may fail to meet changing retail and real
estate market conditions;
• Competition with other participants in the real estate industry
could have an adverse impact on Group income and its ability
to acquire dedicated redevelopment plans, including
development of event spaces, digital infrastructure properties,
develop land and secure tenants effectively; and modular
tenant spaces (white boxes for pop-ups);
• Failure to deliver on sustainability expectations of both
consumers and key stakeholders (B2B and B2C).
The Group has put in place numerous measures to adapt to new consumer trends and
attract them:
• Annual research performed in each geography (Europe and the US) to understand
and anticipate shifts in retail, demographic and cultural changes;
• Appointment of a URW Group Chief Customer Officer as part of a customer-centric
approach, including enhanced digital strategy, resizing of outstanding assets to
adapt retail surfaces and implementation of mixed-use and densification;
• Merchandising and positioning assessments for each flagship asset to future proof
the strategy of the asset and adapt the retail mix to new needs;
• Expansion of leasing into new types of tenants, including more Food & Beverage,
Entertainment, Health & Wellness and Luxury, as well as Digital native vertical
brands;
• Continued development of shopper services to adapt to new customer expectations
and shopper preferences;
• Loyalty programmes and events in malls to enhance the customer shopping
experience, secure URW’s share of wallet and improve customer profiles and
journeys in the mall;
• Disposal of non-core or non-competitive assets in accordance with the divestment
programme;
• Brand platform leading to clear branding guidelines: brand book including the brand
personality + advertising book;
• Globalisation of the marketing strategy to optimise and leverage the Westfield
brand with marketing management at shopping centre level to facilitate the
adaptation;
• Focused brand tracking studies on a regional basis to account for geographical and
cultural differences and shopper preferences; and
• Integrate sustainability as a strong component of the Group’s core business to
support retailer initiatives and be part of the solution.
55
Statista, Retail e-commerce sales worldwide, September 2023.
56
IMF, World Economic Outlook Update, January 2023.
57
In the US excluding the centres for which no comparable data of the previous year is available. In addition, footfall has been restated from the disposals which
occurred during the semester.
58
US Flagships only. US Regionals at -0.9%.
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B. Investment And Divestment
Part of URW NV’s core business model is value creation through investment and divestment of assets. The profitability of these transactions
depends on the accuracy of initial financial assumptions, market conditions (including available financing and investors’ appetite), tax
environment, quality and attractiveness of assets, and legal and regulatory considerations.
The Group may face a risk of illiquidity of the market, which may imply inability to achieve the targeted timing for disposal and/or to obtain
satisfactory pricing terms and/or not achieve the full execution of its disposal programme. The execution of the disposal programme may be
subject to the satisfaction or waiver of JV partners approval and obtaining merger control approval. There is no certainty that these conditions
will be satisfied or waived in the necessary timeframe and therefore disposal may be delayed or not complete.
In addition, a continued slowdown of the investment market and degraded market conditions (increase in financing cost, intervention of central
banks etc.), as well as the potential for a prolonged global recession and general uncertainty on economic evolution, could negatively impact
the availability of capital and may further challenge URW’s ability to implement its disposal programme and/or to develop joint venture
partnerships.
Market uncertainty and high interest rates create challenges with settling at a reasonable transaction price, however the Group sees more
encouraging signs with the recent decrease in long term rates and the expected end of the rates hike cycle.
Non-completion or delay of this strategy could impact deleveraging targets and the rating of the Group as well as access to financing at less
favourable conditions.
Main Risk Factors
Main Risk Management Measures
• Misalignment with URW Group strategy and incorrect underwriting (asset
valuation and forecast);
• Information leakage and market rumours; and
• Failure to execute the announced disposal plan and the US strategic
portfolio reduction programme.
• Group decision-making process closely involves the MB and SB for major
projects based on internal rules and corporate charters;
• Project teams closely involved in the transactions in order to determine
whether the transaction is worth investigating and pursuing. Legal,
financial, technical and commercial reviews of these transactions are
always presented to an Investment Committee for approval before any
binding commitment;
• Due diligence carried out with the assistance of external advisors;
•
Financing strategy in place to mitigate the level of pressure on
deleveraging and preserve access to refinancing market; and
• Recurring strategic review between MB and SB to ensure full alignment
on Group strategy.
C. Refurbishment
As owner and operator of shopping centre and other real estate assets, with a focus on continued differentiation and innovation, URW NV has a
pipeline of expansion, improvement, and refurbishment projects, focusing on mixed-use and densification. While it represents a huge opportunity
to capture or protect market share in the industry, it also implies significant cost and potential risk of failing to deliver in accordance with the
business plan with resulting adverse impact on the business.
There are risks inherent in obtaining timely external authorisations (such as building permits and inspections), securing adequate funding (through
joint venture partners or other), managing the budget, and navigating through potential shortage of labour and materials. Such risks may result
in delay, postponement, cancellation of projects, or exceeding their accounted budgets, which could lead to subsequent loss of rental income.
In addition, with the URW Group’s sustainability ambitions core to the business, there is heavy focus on regeneration of centres, refitting,
recycling, biodiversity etc. and delivering the targets set in the ‘Better Places’ Sustainability Roadmap announced by the URW Group in October
2023. The project teams are well-positioned to anticipate and manage the evolving sustainability risks relating to new building regulations,
environmental regulations, investor/occupier expectations, and green financing.
URW NV continues to manage these risks with major potential impacts on project delivery.
117
Main Risk Factors
Main Risk Management Measures
• Ineffective refurbishment strategy, investment decision and approval
process;
• Failure to obtain required external authorisations;
• Not reaching post-refurbishment leasing and revenue targets;
• Failure to comply with the construction quality, costs and delivery date;
• Inability to secure adequate funding for a project (through joint-
venture partner or other); and
• Refurbishment and Construction sustainability targets not set or
achieved.
• Group’s decision-making process for any investment decision for a project;
• The status of the project, its budget and returns are reviewed on a regular
basis;
• Accelerate plans to move towards more mixed-use projects;
• Third-party specialist advisors and consultants are employed throughout
the pre-development phase to assist in identifying potential hurdles with
external stakeholders and developing action plans to successfully navigate
the issue;
• Employment of construction experts within its own organisation who
ensure design specifications, control of construction and renovation costs
comply with the URW Group’s Environmental Quality Charter and any
regulations applicable to owners;
• Strong third parties claim management process. In addition, insurance
policies cover the Group’s responsibilities;
• For projects developed with a JV partner, pre-development design and
construction plans, pro-
forma leasing estimates and returns, and
construction time schedules are developed and shared with JV partners to
increase the quality of the relationships, mitigate misalignment with JV
partners and ensure successful funding of the project;
• Strategy to partner with third-party investors to reduce the Group’s risk
exposure, capitalise on additional know-how and capture part of the
development margin;
• Establishment of contractual agreements to pre-order in anticipation of
critical materials shortages, minimising the risk of delivery constraints of the
supply chain;
• Improved procurement process to reinforce a Group-wide supply chain;
• Standardisation and industrialisation of construction methods to better
control the cost and schedule of the projects;
• Establishment of an internal team of experts to conduct project reviews in
the design stage to identify improvements and efficiencies to ensure a cost
and schedule-effective project;
• Sustainability built into refurbishment, design and construction processes
and mapping; and
• ‘Better Places Sustainability Roadmap targets set.
D. Leasing & Commercial Partnerships
URW NV as part of a real estate holding company with one of the largest asset portfolios in the world, letting and rent collection is the core
business of the Group. In an ever more complex economic environment, the Group’s ability to achieve leasing targets at the expected level of
rent, and then collect rents depends on the solvency of its tenants (retailers).
Rising inflation, particularly energy prices, creates pressures on increased tenant occupancy and service charge costs, and may also have a
negative impact on leasing activity. The current inflation levels in general over a prolonged period have the potential to impact consumer
spending and increase the likelihood of tenant failures and related requests for rent relief, or public authority interventions/temporary negative
regulations.
Given the current economic environment and the increased risk of tenant failures/bankruptcies, the close management of ‘tenants at risk’ and
rent/debt collection is crucial. Bankruptcies have increased in 2023 (72 stores affected) after a low in 2022 (37).
Rent collection rates continue to improve with 98% of the Group’s invoiced 2023 rents and service charges collected as at February 16, 2024.
Furthermore, during 2023, the Group continued collecting rents related to 2022, increasing the collection rate to 98% (from 97% reported for the
full year 2022 results).
118
Main Risk Factors
Main Risk Management Measures
• Improper management of rent relief, store closings, and tenant
• allowances;
• Tenant financial insolvency/default and store closings; and
• Failure to achieve synergies in terms of leasing and commercial
partnerships targets;
• Failure to deliver sustainability targets and meet tenant/customer
expectations.
• Leasing targets (e.g. prices, deadlines and prospective tenants) are defined
within each region of the URW Group and approved by the URW Group
Executive Committee. Major leases in terms of value and/or special terms and
conditions must be internally approved in advance by Leasing Directors and
the COO US;
• Regular meeting with leasing team and finance team members to review deals
to ensure efficiency and strong internal control processes to approve
allowances for tenants as well as levels of rent;
• Local frameworks to monitor solvency of new tenants and regular checks of
existing tenant solvency;
• Financial guarantees as a prerequisite to the standard lease agreements
(deposit, guarantee, letters of credit);
• Third-party debt collection agency to reduce cost of litigation;
• Constant review of the tenancy report (vacancies, tenants in distress, new
deals, and lease expiration schedule over next 3 years);
• Monthly meetings with directors of construction, leasing and operating
management to monitor the progress of project completion and to adjust
tenant space delivery schedules accordingly;
• Global Leasing platform to develop the trans-continental sourcing/ roadmap
between Europe and US platforms;
• URW Group brand partnership strategy in place with new dedicated business
unit and new organisation/approach;
• The commercial partnerships team are involved in all negotiations with brands
to ensure deal opportunities are maximised;
• Implementation of the sustainability programme with a key workstream on
sustainable consumption; and
• Sustainable Retail Index scheme in place as part of the Better Places Sustain-
ability Roadmap, with strategy to expand to all eligible revenues by 2027.
E. Information Technology Systems & Data – Continuity and Integrity
To support its business & digital objectives, URW NV’s IT Department partners with all business units to provide and maintain the technology to
suit business needs. There are over 400 users (including contractors) between two platforms in the Netherlands and in the US, and over 100
applications.
As all business units strongly rely on IT, the latter is required to be continuously available and data must be protected at all times, from internal
and external threats as well as accidental events.
In the event of such risk occurring within the URW Group, these would lead to a partial or complete unavailability leading to process and activities
disorganisation, and/or regulatory impacts (market regulation, personal data protection).
Main Risk Factors
Main Risk Management Measures
• Cyber risk;
• Unavailability of critical IT systems; and
• Incapacity to guarantee the integrity of data and reports generated by IT
systems.
• Strong governance involving IT, risk management, legal, internal audit,
business stakeholders and management to review IT activities and
investment, including a dedicated committee to also monitor cyber risks
on daily operations;
• Cybersecurity strategy and technology designed and rolled out to prevent
cyber-risks, detect security incidents, and respond quickly to remediate
cybersecurity incidents;
• Integration of cybersecurity aspects in all IT projects and contractual
commitments with IT vendors;
• Regular IT audits to test our protective and detective measures;
• A URW Group Cyber Crisis framework is in place, with specific response
procedures in case of a major IT security event/crisis, which are tested on
a regular basis, and are linked to the GDPR/CCPA Data Breach notification
process;
• A business impact assessment is in place to assess URW Group processes
criticality in the event of a major cyber-attack, as well as the alternative
operating plans if IT systems are not available; and
• Implementation of an IT Disaster Recovery Plan, and a specific cyber
resilience plan for managing a major cyber crisis, both in terms of IT
investigations and IT recovery.
4.2.2.2 CATEGORY #2: FINANCIAL AND TAX RISKS
A. Access To Capital & Financial Market Disruption
URW NV is part of the URW Group and as such covered by Group cross-guarantees. As a REIT with significant financial indebtedness associated
with the 2018 Westfield Transaction (as of December 31 2023, €25,469 Mn at URW Group level)
59
URW faces recurring needs for (re)financing
for its corporate purpose, including funding for the refurbishment pipeline and construction activities, large-scale capital improvement and
maintenance projects for standing assets, and other potential operational financing needs. Therefore, URW is exposed to the risks associated
59
On an IFRS basis.
119
with volatility in credit markets, fluctuations in interest rates and foreign exchange (FX), and other market conditions that could limit access to
necessary funding, which could negatively impact operations and financial results of the Group.
The current macro-economic climate, together with hawkish monetary policies from central banks, have led to higher volatility and execution
risk in the debt and investment markets, more cautious investor sentiment and higher cost of funding with higher margins and base rates, putting
pressure on the Group’s current rating. The impact on URW’s credit rating of disposal achievements and valuation evolution is monitored closely,
as rating downgrade could have negative implications on the access to funding.
The URW Group has taken precautionary measures to ensure its access to liquidity. As at December 31, 2023, the Group had €5,502 Mn in cash
on hand and €8,060 Mn of undrawn credit lines
60
.
Financial markets are now increasingly focused on green and sustainability-linked financing. The URW Group must ensure evolving taxonomy
requirements and ESG rating criteria are monitored and anticipated as an emerging risk. On November 16, 2022, the Group updated its Green
Financing Framework (“Framework”) to support the URW Group’s ambitions to finance its standing assets and development projects with high
sustainability standards.
Main Risk Factors
Main Risk Management Measures
• Rising cost of access to funds due to increase in spreads, change of
rating, appeal of the company/its sector for investors (debt and equity)
or banks, dramatic increase in interest rates, adverse currency exchange
rate movements, or disruption and volatility of capital markets.
Notably, the Group is exposed to:
• Interest rate risks:
o May have a significant impact on financial expenses; and
o Although the Group’s exposure to variable rates is hedged through
derivatives, these hedges could be insufficient or affect the valuation
of derivative instruments.
• The foreign exchange rate between the Euro and other currencies
impact:
o The value of operational and financial expenses, and thus overall
asset value, when translated into euros;
o The results and/or the statement of financial position of the Group;
and
o The Group’s ability to meet its commitments in respect of those
securities and, more generally, its commitments with respect to
debt.
To hedge part of this risk, the Group uses derivatives and debt in foreign
currency. Such instruments may not hedge the underlying assets or
activities perfectly, and as a result changes in the currency exchange and/or
interest rates may have an impact on the cash flows, the results and/or the
financial position.
• Market risks, which can generate losses as a result of fluctuations in stock
markets. The Group is either:
o Directly exposed to fluctuations in stock prices due to the ownership
of shares or financial instruments; or
o Indirectly exposed to fluctuations in stock prices, due to the
ownership of funds, investment instruments or share-based
derivatives that are directly correlated with the price of the asset
underlying such derivatives.
• The use of financing instruments on international markets exposes the
Group to extraterritorial regulations which may have a significant adverse
effect on the Group’s overall financial results.
• The URW Group Asset & Liability Management (“ALM”) Committee
discuss regularly on an ad-hoc basis. It receives regular information on
significant changes in the financial environment;
•
The ALM Committee defines the URW Group Treasury Policy
implemented by the URW Group’s Treasury Department. The ALM
Committee manages and monitors interest rate risk and foreign exchange
risk, making proposals to the Management Boards for execution;
• Internal policies and procedures maintain a conservative approach to
investments and mitigates the risk by not allowing for speculative
positions to be put in place;
•
The URW Group Treasury department regularly provides a
comprehensive report on the Group’s interest rates, position, exposure
to foreign currency, liquidity projections, compliance with bank loans and
facilities covenants, availability under the URW Group’s committed credit
lines. It also proposes (re)financing or hedging operations (if applicable),
and details of any (re)financing operations or transactions (hedging
operations, share buy-backs, etc.);
• The Group has an interest rate macro-hedging policy (through the use of
derivatives) aiming to limit the impact of interest rate fluctuations on the
cost of debt over the next years, in view of its current disposal and
investment plans, its existing hedging programme and debt as well as the
debt the Group expects to raise in the coming years;
• The Group exposure to FX rate fluctuation is partly hedged by either
matching investments in a specific currency with debt in the same
currency or using derivatives to achieve the same risk management goal;
and
• Robust internal procedure ensuring the segregation of duties between
execution of market trading and control functions of such transactions.
• Limited access to funds, in case of unfavourable capital markets or URW
credit deterioration
The Group’s strategy depends on its ability to raise financial resources,
either the form of debt (mainly bank loans, bonds, credit lines and
commercial paper) or equity capital, so that it can finance its general
operating requirements and its investments.
Certain events such as: disruption in the debt or equity capital markets; a
reduction in the lending capacities of banks; changes affecting the real estate
property market or investor appetite for property companies; a downgrade
in URW’s credit rating; deterioration of URW’s financial result; a decrease in
EBITDA and operating cash flows; a decline of URW’s assets valuation or a
change in URW’s ownership structure could affect/limit the ability of the
Group to raise required funding, could increase the cost of such funding and
lead to an increase in the Group’s financial expenses.
• Sensitivity to liquidity risk is monitored in line with the Group Treasury
policy, defined by the ALM Committee;
• The Group Treasury department regularly provides a comprehensive
report on the Group’s liquidity projections, key financial indicators and
availability under the Group’s committed credit lines;
• Undrawn back up facilities
61
at URW Group level of €8,060 Mn as at
December 2023;]
• Regular monitoring of covenants;
• Regular dialogue with rating agencies with a proactive monitoring of
credit metrics;
• Strong and disciplined control of Capex spending in line with the line with
the Group’s deleveraging plan announced in 2021;
• Active reduction of non-staff expense and deferring of non-essential
capital expenditure; and
• Diversification of sources/counterparties.
60
Subject to covenants.
61
Subject to covenants.
120
In addition, some financing contracts are subject to financial covenants that
require the Group to respect certain financial ratios levels (including Loan to
Value (“LTV”), Interest Coverage Ratio (“ICR”), Fund From Operations
(“FFO”)/net debt and /debt yield ratios among others) which may be
affected by the occurrence of Group’s performance deterioration, adverse
market movements, or other material adverse changes. Failure to comply
with any of Group financial covenants could result in an event of default,
which, if not cured or waived, could accelerate related debt and in some
cases trigger a cross default, which could have a material adverse effect on
the Group’s debt, including potential default on URW’s debt.
URW has a solicited rating from both Standard & Poor’s (“S&P”) and
Moody’s.
In the context of the reinstatement of the URW Group distribution, both
rating agencies confirmed in January 2024 that this distribution would have
no impact on the URW Group’s rating.
• Reliability of counterparties or failure to monitor and manage
counterparty risk
Many major international financial institutions are counterparties to the
interest rate and/or foreign exchange rate and deposits contracted by the
Group.
In case of the default by a counterparty, the Group could:
• Lose all or part of its deposits; and
• Lose the benefit from hedges signed with such counterparties.
This could then:
• Result in an increase in interest rate and/or currency exposures; and
• Have a significant adverse effect on the Group, its results and its financial
position.
• Credit monitoring of counterparty and minimum financial ratings
thresholds as condition of continued transactions.
• Risks related to liquidity crisis, euro break-up, country default, or
political instability
Considering its level of debt and of need for (re)financing, the following risks
and their potential impacts could be detrimental to the Group and could
negatively affect the markets and businesses in which the Group operates:
• Credit liquidity crisis;
• A sovereign debt crisis; and
• The exit of the Eurozone or the European Union (“EU”) by a country
where the Group operates (e.g. UK/Brexit).
Those risks could also negatively affect:
• The Group’s operations and profitability;
• The solvency of the Group and of its counterparties;
• The value and liquidity of the securities issued by URW; and
• The Group’s ability to meet its commitments in respect of those securities
and, more generally, its commitments with respect to debt.
• Regular market monitoring and sensitivity analysis to assess liquidity,
rates and FX risks;
• Undrawn back up facilities
62
of €8,060 Mn as at December 31, 2023; and
• Diversification of sources of funding/counterparties.
• Non-compliance of sustainability finance disclosure and taxonomy
requirements, and low ESG rating
• Green Financing Framework updated in November 2022 in line with
market standards as confirmed by a Second Party Opinion from ISS ESG;
• Establishment of a dedicated Green Financing Committee to ensure
framework alignment with the market;
• Answering to the most recognised non-
financial rating agencies,
monitoring questionnaire evolutions and benchmarking of scores;
• • Organisation of ESG roadshows and meetings with investors, and direct
dialogue on sustainability issues with investors;
• Dedicated resource monitoring the evolving regulations and ESG ratings;
• Dedicated working group on Taxonomy regulation, comprising people
from the Sustainability, Consolidation and Corporate Technical teams;
• Formalised Use of Proceeds for Green Bond allocation, and formalised
procedure for analysing, selecting and monitoring assets under the Green
Financing Framework;
• Regular back-testing of asset eligibility to Green Bond criteria; and
• Regular monitoring of green and sustainability-linked loans and credit
lines and Key Performance Indicators (“KPIs”) performance levels.
B. REIT Status & Regime (Tax)
As a REIT, URW NV enjoys the benefits of a lower tax burden. To retain its REIT status, URW NV must comply with the respective local requirements
of the tax regime, which differ per country. Due to the expanded tax structuring complexity, combined with the stapling principle in place
between URW SE and URW NV, the potential risk of noncompliance with the tax requirements is ever present. Disagreements with or challenges
62
Subject to covenants.
121
or investigations from the governmental agencies or authorities in the applicable jurisdiction related to tax law interpretation could result in
severe consequences, ranging from additional tax penalties and fines to loss of a REIT status.
Unlike some European countries, in which the repeal of a REIT regime is a potential risk, the US views REITs favourably, and the focus is more
on whether the REIT is properly classifying its income. With URW NV’s increased exploration of revenue sources, there could be a heightened
risk of improper classification of income and invite challenges.
More generally, the high levels of debt that governments have incurred as a result of various public subsidy programmes in dealing with the
COVID-19 crisis has resulted in significant budgetary deficits. As governments look to recover from these fiscal challenges there is a risk of an
increase in taxes generally, thus also affecting URW NV.
Although REITs are generally required to distribute most of its income to shareholders, the absence of dividends this year would be in compliance
with the REIT rules based on the financial impact of the pandemic, from which most industries are still recovering, and URW Group’s commitment
to deleverage.
Main Risk Factors
Main Risk Management Measures
• Loss of REIT status or other tax benefits due to external factors;
• Improper interpretation and/or application of tax law and REIT
requirements;
• breakdown of URW processes to follow tax law and REIT requirements;
• Improper classification of income;
• Exceeding allowable non-qualifying income;
• Failure on tax determination, reporting, tax remittance other than
theoretical disagreement.
• Tax employees are experienced and in a process of continuous training
in order to increase awareness of potential errors;
• Risk assessment of the potential loss caused by changes in tax
regulation;
• The Group is a member of European Public Real Estate Association
(“EPRA”) (in the EU) and National Association of Real Estate Investment
Trusts (“NAREIT”) (in the US) industry groups, which promote modern
and predicable REIT regimes;
• Active legal teams (both internally and through external counsel review)
to monitor and anticipate potential changes in REIT regimes and/or
regulations as well as any changes to tax laws generally;
• Reviews of tax calculation accuracy through consistency tests and
checks both internally at the Group level and through external advisory
firms;
• Reviews of tax prerequisites/risks for deals to go to the
Investment/Divestment Committee with a formal sign-off process
detailed in the Compliance Book; and
• Tax employees are in continuous dialogue with, and provide training to,
local colleagues to monitor and review the characteristics of ongoing
operations and transactions to ensure that the REIT income thresholds
are adhered to.
4.2.2.3 CATEGORY #3: SUSTAINABILITY RISKS
A. Recruitment, Retention & Succession
Considering the very competitive talent market (including the very low unemployment rates in some local markets) as well as the need to retain
talent and knowledge, URW may face important risks related to recruitment, retention and succession of talents. Aligned to the global “Great
Resignation” across all geographies, industries, and market segments, URW’s employee turnover and resignations reached a peak level during
the post-COVID-19 period.
Despite the competitive market conditions, there is a strong level of control on resignations and retentions of key talent. The Group continues
to actively listen to employees, reinforce the strong cultural elements, focus heavily on employee engagement, and position URW to attract and
retain the talent needed to succeed. The Group is adapting the level of resources to the reprioritisation of projects and processes simplification
whilst leveraging as much as possible the natural turnover and restructuring opportunities.
Main Risk Factors
Main Risk Management Measures
• Failure to recruit appropriate talent to maintain strategic
capabilities;
• Failure to retain key employees; and
• Failure to set up and secure a formal succession plan.
• Develop and support URW’s “employer brand” with an increased presence
on social media;
• Implement ‘Levelling’ system to better support career evolution and ensure
fair compensation for every role;
• Enhanced long-term incentive programme to increase retention and
attractiveness;
• Maintaining its highly successful graduate programme;
• Monitoring continued attractiveness of compensation and benefits packages;
• Partnering with the best head-hunting firms to regularly map the best
external talent;
• Developing a strong co-optation programme;
• Annual engagement surveys to design and implement relevant action plans
to make URW a great place to work;
• Designing and implementing ambitious people-oriented policies on flexible
working, wellbeing, diversity and inclusion, and a sustainable work
environment;
• Providing permanent learning and development opportunities (e.g.
international mobility, cross-functional mobility;
• URW Group Global talent review process in place including systematic 360°
feedback for all employees, using the same framework and same tools across
the URW Group; and
• URW Group Global Succession Planning to identify potential successors for all
positions reporting to a MB member, all positions reporting to the COO, all
heads of key functions, and other selected key positions.
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B. Sustainability Risks
As a developer and operator of retail assets, the URW Group has identified a broad range of sustainability risks and opportunities which are
related to many departments and activities within the business such as energy efficiency/transition, asset resilience to climate change, evolving
taxonomy and environmental regulations, supply chain due diligence, green financing and societal risks – all of which are integrated into URW
NV’s ERM framework.
In accordance with CSRD requirements, the URW Group has completed its double materiality assessment to ensure external as well as internal
impacts (from URW Group activities) are assessed. This exercise was conducted in parallel with the URW Group sustainability risk assessment
update which aims to align with the CSRD.
Sustainability risks are long-term risks, leading to direct or indirect impacts on the URW Group:
• Direct impacts: change in weather patterns impacting our assets, energy efficiency regulations being implemented in our countries
of operations, etc.; and
• Indirect impacts: cities requiring high level of environmental performance in our development projects, regulations impacting our
upstream supply chain and the cost of raw materials and energy (e.g. increased price of carbon emissions for energy producers and
large emitters such as cement manufacturers and steel manufacturers), financial institutions integrating ESG risks in their portfolio
management strategies, etc.
Managing these risks allows the URW Group to:
• Maintain its license to operate and comply with applicable regulations;
• Support its talent attraction and retention strategy;
• Support its financing policy (e.g. through sustainability-related financing instruments);
• Manage costs, and specifically utilities costs recharged to tenants; and
• Build its leadership and differentiation for visitors and tenants.
The nature of the risks (systemic, long-term risks) and the external environment emphasises the need for periodic reassessment. The sub-risks
covered are highly political topics, with a high-level agenda at the United Nations (United Nations Sustainable Development Goals, United Nations
Framework Convention on Climate Change, etc.), regional (European/US levels), state/national and city levels. Specifically on climate change
topics, scientific consensus has been built at international level on causes and consequences (notably via the Intergovernmental Panel on Climate
Change) but scientific research is constantly evolving on the physical consequences of observed climate change and their rhythm. In parallel,
these risks are progressively integrated by other market players (and specifically financial institutions and their integration in their risk
frameworks impacting asset allocation) and regulators (EU Taxonomy, EU Corporate Sustainability Reporting Directive (“CSRD”), local energy
efficiency and carbon regulations, etc.) constantly and progressively raising the expectation level on the URW Group.
In accordance with CSRD requirements, the URW Group has completed its double materiality assessment to ensure external as well as internal
impacts (from URW Group activities) are assessed. This exercise was conducted in parallel with the URW Group sustainability risk assessment
update which aims to align with the CSRD.
For more details on natural disasters, please refer to Section 4.2.2.4, Subsection B and Section 4.3, Transferring Risk to Insurers. For the full
overview on risks and action plans please refer to the URW Group Sustainability report on
https://www.urw-nv.com/en/investors/financial-
information.
4.2.2.4 CATEGORY #4: SECURITY, HEALTH AND SAFETY RISKS
A. Terrorism & Major Security Incidents
The core business of URW NV is based on assets open to the public with a significant footfall. As such, it is important that we maintain an
appropriate safety and security programme to welcome customers. Since rolling out the “Westfield” brand in Europe for global recognition and
the iconic status of some assets, there may be increased levels of threats to those assets.
While the threats of a terrorist attack are highest in Continental Europe, the risk of an active shooter incident is most likely in the US. In addition,
the current economic climate and cost of living crisis could give rise to local societal risks such as increased violence, protests, riots or industrial
action at URW NV’s assets, causing a potential reduction in footfall and impacts on operations. Despite crisis management programmes and
training in place and close cooperation with local law enforcement agencies, the potential threats of terrorism and active shooter situations can
never be eliminated. Should a serious security, safety, or terrorism event occur that results in casualties or even property damage, URW NV could
experience a negative impact on its operations, its financial results, and its brand and reputation.
Main Risk Factors
Main Risk Management Measures
• Failure to develop and implement a security programme that: (i) Remains
aware of terrorist threats or other major security concerns – including
active shooter; and (ii) Mitigates the impact of a major security incident
including terrorist attack/active shooter event; and
• Failure to develop and implement an effective crisis management
framework.
• Dedicated organisation for security and crisis management;
• Security governance and guidelines (including refurbishment projects),
security policies and procedures implemented at all locations with
appropriate physical security measures and access control;
• Annual security action plan programme to identify action plans and
include OPEX and CAPEX requirements in the 5-year business plan;
• External and internal audits of centre security measures;
• Routine interaction with counterterrorism, national intelligence services,
and local law enforcement to remain aware of emerging terrorist threats
or other security concerns;
• Shopping centres conduct terrorist attack/active shooter crisis response
exercises with external experts;
• Global incident notification/escalation process; and
• Crisis management policy and framework including annual crisis training
and exercise campaigns.
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B. Health And Safety (Including pandemic and natural disasters)
As real estate owners, we have responsibility towards ensuring the safety and wellbeing of shoppers, retailers, vendors, and employees alike.
The Group has a significant footfall. This also includes maintaining proper building and equipment maintenance protocols to minimise the risk of
injury or illness, protect the environment, and mitigate the impact of unexpected events on the building and on business continuity.
Each country where URW NV operates has a specific set of health and safety laws, and regulations. Developing and implementing an effective
compliance framework, monitoring and complying with new or evolving Health, Safety and Environment (“HSE”) laws and regulations, and
ensuring compliance with the URW Group’s internal HSE policies is of critical importance in managing this risk. This is primarily accomplished
with internal teams with expertise in health and safety in the US.
Certain regions in which URW NV operates have significant exposure to natural disasters – e.g. earthquakes and wildfires in California, hurricanes
in Florida and flooding in the Netherlands, and climate change related natural events exposure. For assets potentially exposed to natural
disasters, emergency response plans are defined by the local management team with support by regional and corporate teams.
As the URW NV’s operational assets are places open to the public in significant numbers, there is significant risk of exposure to operational
disruption in the event of a pandemic outbreak. As seen with COVID-19 in 2020 and 2021, this can result in government-imposed closure of our
centres. During periods of trading throughout pandemics (and emerging variants), the URW Group implemented appropriate sanitary and
management measures for the safety of employees, retailers and guests in our operational assets and corporate offices. Non-compliance with
the applicable health and safety regulations could lead to claims, reputational damage, regulatory fines and imposed lockdowns of the shopping
centres, which could result in severe negative financial consequences for URW NV.
For more details on natural disasters, please refer to Section 4.3, Transferring Risk to Insurers.
Main Risk Factors
Main Risk Management Measures
• Failure to implement effective strategies that seek to minimise, prevent,
and mitigate life safety incidents;
• Failure to implement processes that may mitigate and manage the impact
of any natural disaster (earthquake, flooding, climate change related
significant natural events, and uninsured risk);
• Injury or loss of life due to failure to comply with sanitary, health and
safety regulations; and
• Insufficient response to pandemic outbreak.
For US portfolio
•
Verification that contractors’ health and safety procedures are
appropriate and that their staff have the proper licenses, equipment and
training;
• External Audit by Bureau Veritas (third-party vendor) with the assistance
of epidemiologists based on latest recommendations of health
authorities;
• Centre management conducts routine property tours and identifies
hazardous conditions and implements corrective actions;
• Maintenance and inspection conducted by third-party contractors of all
relevant equipment subject to regulation;
• Internal documentation processes to justify the compliance with sanitary
protocols;
• Fire safety systems are routinely inspected as required by local fire
regulations; Corporate and Construction Health and Safety policies
incorporate regulations and are based on industry-
accepted best
practices in the absence of a specific governing regulation; and
• Global Pandemic response plan.
Natural disaster
63
• Periodic assessment of European and US assets most exposed to natural
disasters (coastal flooding, flash floods, heatwaves,
storms and
earthquakes) to validate response plans;
• US assets are covered against:
o Earthquake with a limit of $400 Mn for California and $250 Mn for
Pacific Northwest in the annual aggregate (due to insurance market
limitations);
o Storm/hurricane with a limit of $1 Bn in the annual aggregate; and
o Flood with a limit of $500 Mn in the aggregate, sub-limited to $100
Mn in the aggregate for high-risk flood zones.
• Periodic review on prevention/protection plans and risk mitigations for
the most exposed assets; and
•
Each centre in a natural catastrophe zone conducts emergency
preparedness drills each year.
4.2.2.5 CATEGORY #5: LEGAL AND REGULATORY RISKS
A. Legal, Regulatory & Fraud
URW NV URW operates in highly regulated countries. Moreover, operations also require to comply with a myriad of laws and regulations related
to the URW Group activities in areas such as leasing, asset and property management, various licensing and permits, construction and
maintenance, health and safety, personal data privacy, financial and securities markets, and anti-trust regulations, as well as with some
extraterritorial regulations. As such, the risk of failing to detect, anticipate, implement and comply with applicable laws and regulation may
result in legal/regulatory breach, regulatory investigation, negative reputational impact and/or liabilities resulting in fines and penalties,
damages, the loss of licences, and/or any potential legal action. URW NV also operates in highly litigious countries, where the Group is potentially
exposed to the risk of major litigations, including class actions.
The increasing judicialisation and evolution of the legislative and regulatory production creates a legal instability and makes it difficult to detect
and anticipate the direct or indirect impacts on the Group’s activity, especially in terms of sustainability (e.g. taxonomy, emissions trading
scheme, extra-financial communication).
63
For more information, please see Section 4.3 Transferring Risk to Insurers.
124
The challenge for the Group is to be able to actively participate in the elaboration of these regulations, in order to put into perspective the
specificity of the real estate sector and the potential impacts, as well as to allow the emergence of new business opportunities, and, in Europe,
to face any new requirements in terms of controlling its legal and regulatory risks. Protecting assets and preserving their values are real issues
in the difficult economic climate and exacerbated by the ongoing potential sanitary situation as well as economic and geopolitical environment.
Governments may take measures to mitigate the impact on business and consumers – such measures have an impact on indexation and rent
collection. In addition, sustainability-related regulations and disclosure obligations are increasingly stringent and diverse.
In the course of its activities, the Group collects and processes diverse personal data from customers, employees, business partners and service
providers. The Group is subject to data protection regulation such as the GDPR (in Europe) whose provisions have been interpretated by each
member state by the enactment of national standards and by jurisprudence developed by their national authorities. At the same time, some
states in the US such as California, Washington and Illinois have implemented their own regulation regarding data protection. Failure to protect
this personal data could result in regulatory investigation, legal (class) actions, fines and penalties as well as negatively impacting the Group’s
reputation.
Another increasing risk in this category exists mainly from an IT and crime perspective due to increased email exchanges and other attempts at
social engineering crime. While we have seen an increase in phishing schemes and other attempts, none have been successful in defrauding URW
NV of any monies, data or any personally identifiable information.
URW conducts its core business in 2 countries and drives its real estate activity with a wide variety of stakeholders, business partners and other
intermediaries. Due to the nature of URW’s business activities and relationship with business partners, as well as its wide geographical scope of
operations, URW faces numerous stringent international and national anti-bribery, corruption, money laundering and fraud laws and regulations.
Main Risk Factors
Main Risk Management Measures
• Non-compliance with laws and regulations at governmental, federal,
state, province, local country or sector level;
• Failure to prevent and detect fraud against URW NV: the Group could be
exposed to attempted fraud (identity theft for example); and
• Embezzlement.
• Deployment of the URW Group’s legal policy, a set of internal procedures
and standard forms to state, province, local country or sector level,
secure contractual frame, reduce litigation exposure to protect Group
interests and ensure compliance with applicable regulations;
• Legal department organisation around (i) 2 geographical platforms
(Continental Europe and US), and (ii) a URW Group Legal Support
(corporate and security law, data and brand protection);
• Comprehensive legal training on complex or new regulations to raise
awareness and develop learning curve from pending litigation;
• External advisors and law firms provide constant updates on both
emerging legislation and recent case law on specific matters;
• Group in-house lawyers are specialists in jurisdictions in which the Group
operates and set the network of external counsel and experts as required;
and
• Through its action within the various national professional organisations,
the Group endeavours to anticipate any legislative initiatives likely to
have an impact on its business.
• Inability to detect and anticipate new regulations (including changes or
evolutions) with (potential) impact on retail sector and/or the Group.
• Legal watch and client alerts from law firms;
• Group workshops on URW Group/local mapping lead by legal and Public
Affairs departments;
• Definition of URW Group/local priorities, timelines and institutional
calendars to develop and coordinate strategy;
• Interaction with other stakeholders, public authorities and professional
organisations; and
•
Coordinated internal organisation to detect and address new regulations.
• Failure to prevent or mitigate material negative impact of any regulatory
investigations and/or litigation: in the normal course of URW NV’s
business activities, the Group could be subject to legal, administrative,
arbitral and/or regulatory proceedings.
• Set out an escalation process;
• Internal alert process to inform the URW Group General Counsel,
recurring reporting on (potential) material litigations and escalation
process for litigation strategy;
• Claim management process for development projects;
•
Set of preventive internal programmes to comply with the main
applicable regulations and effectiveness review on a recurring basis; and
• “Dawn raid” policy for any unexpected on-site investigation.
• As a publicly traded global company, URW NV is required to comply with
various stock market/exchange regulations and requirements with
respect to full and proper disclosure and transparency to provide clear,
real and objective information.
• The Market Abuse Regulation related to insider trading is detailed in the
URW Insider Trading Rules procedure, setting out common principles
applying to the qualification of inside information, the disclosure of such
information, trading bans during pre-de
fined periods of time and
disclosure requirements for designated persons; and
• A Group Disclosure Committee is responsible for qualifying inside
information, if any.
• In the course of its activities, URW NV collects and processes diverse
personal data from customers, employees, business partners and service
providers. Failure to protect this personal data could result in fines and
penalties, as well as negatively impacting URW NV’s reputation.
• The Group has developed and updated a robust and effective Data
Privacy Protection programme to comply with GDPR (EU) and regulations
that are enacted in countries where the Group operates, in particular in
the US;
• Appointment of a URW Group Data Protection Officer and a network of
local Data Privacy Officers in some major countries or Local Data
Protection Correspondents where the URW Group is present who meet
every two months in a dedicated committee to share best market
practices and monitor group initiatives and projects;
• Organisational and technical processes: retention period policy, data
breach notification process, update of the employee privacy policy. IT
Security department included in the framework;
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• URW Group-wide e-learning training on GDPR and CCPA for each
employee and specific trainings for business population (marketing, IT,
HR);
• Signature of data processing agreement with major IT contracts service
providers; and
• Processes and registers were implemented.
• Non-compliance with international/national anti-corruption and
influence peddling regulations:
o As a global company, URW NV must comply with the highest
standards and anti-corruption regulations, such as the French Sapin
II Law, the Foreign Corrupt Practices Act (“FCPA”) (US) or the UK
Bribery Act (“UKBA”) (UK);
o Non-compliance with international/national anti-money laundering
laws; and
o Failure to comply with anti-corruption, influence peddling, anti-
money laundering risk may lead to: material reputational damages;
financial, administrative or disciplinary sanctions; and may have a
negative impact on investors’ trust.
• A rigorous “zero tolerance” principle based on an effective Anti-
Corruption Programme (“ACP”) applicable in all entities controlled by the
Group(1) (based on the 8 pillars of the French Sapin II Law. In addition,
the ACP incorporates provisions of internat
ional conventions and
national laws and regulations applicable to the Group’s business
activities;
• An alert system (whistleblowing) supported by an external anonymous
and confidential reporting channel is in place and available for employees
and contractors;
• Interactions with business partners are subject to pre-approval of the
URW Group “Know Your Partner” procedure to evaluate third parties’
exposure to the corruption, sanctions and influence peddling risks;
• Local Compliance Correspondents support the coordination of the ACP
and manage processes and procedures in each region;
• Dedicated classroom training for most exposed departments and an e-
learning module mandatory for all URW NV staff describing the general
principles related to business ethics and the prevention of corruption,
bribery and influence peddling;
• The Group has implemented a secure payments procedure and has
formalised the rules for opening, changing and closing bank accounts;
• Awareness of fraud scenarios is raised in departments throughout the
year and illustrated by real cases; and
• I
n the case of attempted fraud, the Group Compliance Officer
systematically shares the information via email with all concerned
employees, including a reminder of preventive procedures.
4.3 TRANSFERRING RISK TO INSURERS
The Group is covered by insurance programmes, which are underwritten by leading insurance companies located in various markets (in Europe
and the US notably).
These programmes are actively monitored by the URW Group Insurance department in liaison with local teams and insurance brokers.
Under the property damage and terrorism programmes, the Group’s property assets are for most of them insured, for their reconstruction value
as well as for business interruptions and loss of rent subject to limitations of coverage with respect to natural catastrophe risks due to limited
insurance market capacities (for more details, refer to the table below). All assets are regularly assessed by internal or external property
insurance valuers.
In accordance with insurance market practices, property damage insurance programme requires material damages to trigger a coverage of
financial loss or business interruption. For pandemics, in the current legal and contractual, such cover is not granted and not available on the
insurance market.
Assets located in the US and The Netherlands are insured against terrorism under a dedicated programme that includes a limit per claim based
on the asset that has the highest insured value with respect to rebuilding cost and loss of rent.
The Group has also taken out general liability insurance policies that cover financial damages resulting from third-party claims.
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Type of insurance
Coverage and main limits based on 2023 insurance programme
Property damage, loss of
rent/business interruption
Coverage: “all risks” basis (subject to named exclusions) and terrorism.
Basis of compensation:
• Reconstruction costs for building, replacement cost for equipment;
• Loss of rent or business
interruption with a compensation period of between 12 and 60 months depending
on the asset.
Limits of compensation:
• The Netherlands:
o Earthquake: limit of €100 Mn per country in the annual aggregate;
o Flood: limit of €25 Mn (dike failure is excluded, which is market practice); and
o Terrorism: limit of €
900 Mn per occurrence covering material damages and loss of rent/business
interruption following a terrorist attack.
• United States: limit of $1.35 Bn per occurrence covering all material damages and loss of
rent/business
interruption including terrorism events. The programme includes sub-limits notably for natural
catastrophe
risks:
o Earthquake: the overall programme sub-limit for earthquakes is $500 Mn per occurrence and
annual
aggregate subject to additional inner sub-limits of:
Sub-
limit of $400 Mn for California earthquakes: this limit applies to all locations in California.
A retention per location of 5% of total insured values would be applicable;
Sub-
limit of $250 Mn for Pacific Northwest earthquakes: this limit applies to SouthCenter in
Tukwila, Washington.
A retention per location of 3% of total insured values would be applicable;
o Windstorm/hurricane: limit of $1 Bn in the annual aggregate. A deductible of $50,000 per
occurrence
would be applicable;
o
Wildfire: limit of $1 Bn in the annual aggregate. A deductible of $50,000 per occurrence would be
applicable; and
o Flood: sub-limit of $500 Mn in the aggregate sub-limited to $100 Mn in the aggregate for high-
hazard
flood zone. A $500,000 deductible per occurrence for properties in designated flood zones would be
applicable.
In the US in particular, the combination of the concentration of many assets in the same area with a
high
exposure to natural catastrophe risks and the limited capacity available from insurers to cover
these risks
exposes URW SE and its controlled subsidiaries to retain a significant share of these risks as uninsured.
General civil liability
Coverage: “all risks” basis (subject to named exclusions) for damage caused to third parties.
The programme includes sub-limits, for example, to cover liability claims following a terrorist attack.
General environmental liability
Coverage for damage caused to third parties by accidental pollution and for gradual pollution.
Main construction projects and renovation works on properties are covered by contractors’ All Risks policies for their total construction cost.
Defects affecting the works are covered by contractors’ warranties.
The 2023 premium for URW NV amounted to €29.7 Mn ($32.3 Mn
64
). Most of these premiums were invoiced to third parties (e.g., co-owners,
tenants).
URW NV did not incur any major uninsured losses in 2023.
At the end of 2023, the Group’s insurance programme was successfully renegotiated covering the Group portfolio with placement in the
European, UK and US insurance markets mainly with effect from January 1, 2024.
64
Only for Insurances directly managed by URW NV, excluding premiums reinvoiced from third parties.
127
INFORMATION ON THE
COMPANY, SHAREHOLDING
AND THE SHARE CAPITAL
128
5.1 INFORMATION ON THE COMPANY
5.1.1 GENERAL INFORMATION
Unibail-Rodamco-Westfield N.V. (“URW NV” or the “Company”) has its corporate seat (statutaire zetel) in Amsterdam, the Netherlands and its
registered address at Schiphol Boulevard 315, World Trade Center Schiphol - Tower F, 1118 BJ Schiphol (Haarlemmermeer), the Netherlands.
URW NV is registered with the Commercial Register of the Dutch Chamber of Commerce (handelsregister van de Kamer van Koophandel) under
number 70898618. The LEI code of the Company is 7245002R31EKBDW59H93 and its telephone number: (+31) 020-6582533.
Its financial year runs from January 1 to December 31.
Information about the Company is available on its website: www.urw-nv.com
.
5.1.2 LEGAL FORM AND APPLICABLE LAW
On February 14, 2018, URW NV was incorporated as Unibail-Rodamco B.V., a private company with limited liability (besloten vennootschap met
beperkte aansprakelijkheid) under the laws of the Netherlands. On March 22, 2018, Unibail-Rodamco B.V. changed its legal name to WFD Unibail-
Rodamco N.V. and converted its legal form to a public limited liability company (naamloze vennootschap) pursuant to a notarial deed of
amendment and conversion in accordance with a resolution of its general meeting adopted on March 15, 2018. On June 9, 2020, WFD Unibail-
Rodamco N.V. changed its name to Unibail-Rodamco-Westfield N.V. pursuant to a notarial deed of amendment in accordance with a resolution
of the General Meeting. The current laws and regulations of the Netherlands are applicable to the Company.
5.2 SHARE CAPITAL AND OTHER SECURITIES GRANTING ACCESS
TO THE SHARE CAPITAL
5.2.1 AUTHORISED SHARE CAPITAL – FORM OF SHARES
The authorised share capital of the Company amounts to €550 million and is divided into 660 million class A shares and 440 million class B shares,
with a nominal value of €0.50 each.
As at December 31, 2023, the Company’s share capital is €116,144,853 and divided into 139,041,391 class A shares and 93,248,315 class B shares
with a nominal value of €0.50 each, representing 59.86% and 40.14%, respectively, of the Company’s issued share capital.
In June 2018, the class A shares of the Company were individually stapled with the ordinary shares of URW SE, a public limited liability company
under the laws of France, with its registered office located in Paris and Companies Register under number 682 024 096, to form Stapled Shares.
The “URW Group” is composed of the Company, URW SE and all the controlled entities whose financial information is included in the consolidated
accounts of the Company and/or of URW SE.
Following the request filed by URW Group with Euronext as announced on February 9, 2023, the URW Group has obtained the approval of the
Euronext Listing Board on February 28, 2023 to change its market of reference from Euronext Amsterdam to Euronext Paris and delist the URW
stapled shares from Euronext Amsterdam, while maintaining their listing on Euronext Paris. The delisting from Euronext Amsterdam is effective
on April 28, 2023. As part of these changes, URW will no longer be represented in the Dutch AEX25 index as from March 9, 2023. These changes
will not impact URW’s inclusion in the CAC40 index.
The delisting from Euronext Amsterdam would not affect the liquidity of the stapled shares nor have any impact on trading, URW’s structure
(including the stapled share principle) or the ISIN code (FR0013326246) of the URW Group. All transactions currently carried out at Euronext are
and will remain processed through the Euronext single order book.
As at December 31, 2023 the Stapled Shares are admitted to trading on Euronext Paris, under ISIN code FR0013326246 and trading symbol EPA:
URW (Euronext Paris). Any holder of Stapled Shares will have all the rights and be under all the obligations of both a shareholder of URW SE (with
respect to the URW SE shares that are part of his Stapled Shares) and a shareholder of URW NV (with respect to the class A shares that are part
of his Stapled Shares). Reference to 5.2.2.1 for CDI’s.
5.2.2 SECURITIES GRANTING ACCESS TO THE SHARE CAPITAL
Securities granting access to the capital of URW NV are described below.
5.2.2.1 CDIS (CHESS DEPOSITARY INTERESTS)
The term “CDI” designates Australian CHESS (clearing house electronic subregister system) depositary interests that represent beneficial
ownership in Stapled Shares registered in the name of or on behalf of CDN (CHESS Depositary Nominees Pty Limited, a subsidiary of the Australian
Securities Exchange). CDIs are admitted for trading on the Australian regulated market ("ASX").
Twenty CDIs collectively represent a beneficial interest in one Stapled Share. CDN enables holders of CDIs to exercise
65
the voting rights attached
to the Stapled Shares. The CDI can be converted into Stapled Share at any time, and inversely.
As at December 31, 2023, 135,577,220 CDIs (corresponding to 6,778,861 Stapled Shares) were outstanding, representing 2.92% of share capital.
65 Holders of CDIs can either (i) ask CDN to vote in a given way, or (ii) request that CDN grant the holder with the power to vote at the General Meeting.
129
5.2.2.2 PERFORMANCE SHARES AND PERFORMANCE STOCK OPTIONS
The long-term remuneration plan of the Group combines two remuneration elements in Stapled Shares: the majority are granted as Performance
Shares (PS), while a small portion are Performance Stock Options (SO). This is intended to strengthen the engagement of beneficiaries in their
contribution to the Group’s performance.
As at December 31, 2023, the number of potential Stapled Shares to be theoretically issued after taking into account cancellation (assuming the
required performance and presence conditions are attained and excluding any cancellations that may occur during the course of the plan)
represents 1.00% of URW NV's fully-diluted share capital with regard to the outstanding PS, 0.01% of URW NV's fully-diluted share capital with
regard to the Retention Shares and 0.42%
of the fully diluted share capital with regard to the Performance Stock Options.
5.2.3 OTHER SECURITIES GRANTING ACCESS TO THE SHARE CAPITAL
None.
5.2.4 CHANGES IN URW NV'S SHARE CAPITAL AS OF ITS INCORPORATION
Since the incorporation of URW NV, URW NV’s share capital has changed as follows:
Date
Movements in the share capital
Number of shares
issued
Number of shares
Total share capital
Premium resulting
from transaction
31/03/2020
Creation of PS (2015 tranche)
8,340
231,545,256
€115,772,628
€0
31/03/2019 Exercise of SO (2012 tranche) 8,713
231,553,969
€115,776,985
€72,549
30/04/2019 Creation of PS (2016 tranche) 18,432 231,572,401
€115,786,201 €0
2019
30/04/2019 Increased of share capital reserved
for URW SE employees
47,337 231,616,738
€115,809,869 €312,309
08/07/2019 Reimbursement of ORA 131 231,616,869
€115,809,935 €1,181
08/07/2019
Reimbursement of ORA
7,051
231,626,920
€115,813,460 €63,485
31/03/2020
Creation of PS (2017 tranche)
14,235
231,641,155
€115,820,578 €0
2020
04/06/2020
Creation of PS (2016 tranche)
10,395
231,651,550
€115,825,775
€0
04/06/2020
Increased of share capital reserved
for URW SE employees
69,150
231,720,700
€115,860,350 €154,690
2021
31/03/2021
Creation of PS (2017-2018 tranches)
23,990
231,746,876
€115,873,438
€0
24/06/2021
Creation of PS (LTI SI* tranche)
23,986
231,768,676
€115,884,338
€0
24/06/2021
Increased of share capital reserved
for URW SE employees
74,055
231,842,731
€115,921,366 €0
2022
29/04/2022
Creation of PS (LTI Plan 2018)
9,410
231,852,141
€115,926,071
€0
29/04/2022
Creation of PS (LTI Plan 2019)
50,092
231,902,233
€115,951,117
€0
29/04/2022
Increase of share capital reserved
for employees
105,741
232,007,974
€116,003,987 €0
25/05/2022
Creation of PS (LTI SI* Plan 2018)
7,429
232,015,403
€116,007,702
€0
2023
22/03/2023
Creation of PS (LTI Plan 2020)
143,311
232,158,714
€116,079,357
€0
22/03/2023
Creation of PS (LTI Plan 2021)
1,698
232,160,412
€116,080,206
€0
04/05/2023
Increase of share capital reserved
for employees
128,408
232,288,820
€116,144,410 €0
13/09/2023
Creation of PS (LTI SI* Plan
2022-2023)
886
232,289,706
€116,144,853
€0
Note: increases in the share capital associated with the exercise of Performance Stock Options (SO), creation of Performance Shares (PS), cancellation of shares and reimbursements of bonds
redeemable in shares (Obligations Remboursables en Actions
, “ORA”) are stated by a statement of the URW SE Management Board.
* LTISI: Additional Performance Shares granted in 2018 related to the successful integration of Westfield.
5.3 SHARE BUY-BACK PROGRAMME AND SHARE ISSUANCES
5.3.1 AUTHORISATION TO BUY BACK SHARES
At the General Meeting held June 27, 2023, the Management Board (“MB”) has been authorised (for 18 months following the General Meeting) to
resolve for the Company to purchase and acquire, with the approval of the Supervisory Board (“SB”), on a stock exchange or otherwise, up to
10% of the class A shares in the Company's capital in issue from time to time (separate or as part of Stapled Shares) and up to 100% of the class
B shares in the Company's capital in issue from time to time, in each case at a price per share between the nominal value of the share concerned
and 110% of the average market price of the Stapled Shares on Euronext Amsterdam (such average being calculated by reference to the closing
prices on each of the five consecutive trading days preceding the date the purchase or acquisition is agreed upon by the Company). Any shares
in the Company's capital held by the Company on the date of the General Meeting or that may be purchased and acquired by the Company during
the period of 18 months following the General Meeting shall be cancelled in one or more tranches, provided that the implementation of any such
cancellation (whether or not in a tranche) shall be subject to the determination by the Management Board of the exact number of shares to be
cancelled (in the relevant tranche, as relevant) and the exact timing thereof.
The MB is authorised to i) acquire one or more class A shares in the Company's capital (separate or as part of Stapled Shares) from Unibail-
Rodamco-Westfield SE (“URW SE”), ii) acquire one or more class A shares in the Company's capital from anyone other than URW SE (including by
means of a share buy-back programme), provided that such acquisition is made (a) pursuant to and in accordance with a joint share buy-back
programme approved by or on behalf of (the relevant corporate bodies of) the Company and URW SE or (b) jointly and in connection with (but
not necessarily concurrently with) an acquisition of ordinary shares in the capital of URW SE by URW SE; and/or iii) acquire one or more class B
shares in the Company's capital from URW SE, in each case (x) subject to the MB being authorised by the General Meeting to acquire such shares
in the capital of the Company and (y) with due observance of Dutch law, the Articles and the relevant limitations set out in the shareholders'
authorisation as applicable from time to time.
130
5.3.2 REVIEW OF THE USE OF THE AUTHORISATION TO ACQUIRE SHARES AND INFORMATION ON
THE TRANSACTIONS CARRIED OUT DURING THE FINANCIAL YEAR ENDING DECEMBER 31,
2023
During the 2023 financial year, the Company did not acquire any shares in its capital.
The Company has not used any derivative products in respect of shares in its capital and has currently not entered into any market-making and/or
liquidity agreement in respect of shares in its capital.
5.3.3 AUTHORISATION TO ISSUE SHARES
Due to the Stapled Share Principle, any issuance of the stapled shares induces an issuance of Unibail-Rodamco-Westfield SE shares and Unibail-
Rodamco-Westfield N.V. Class A shares. In order to be able to issue or to subscribe shares validly, the general meetings resolutions of Unibail-
Rodamco-Westfield SE and Unibail-Rodamco-Westfield N.V. should be aligned.
With effect from the General Meeting held on June 27, 2023, the MB is authorised, for a period of 18 months following the General Meeting, to
resolve, subject to SB approval and the Stapled Share Principle, to issue, or to grant rights to subscribe for, Class A Shares representing up to
10% of the Company's issued share capital as at the date of the General Meeting.
In addition, the General Meeting on June 27, 2023, authorised the MB, under the approval of the SB, for a period of 18 months following the
General Meeting, to resolve, subject to SB approval and the Stapled Share Principle (as defined by the Company's articles of association), to
issue, or to grant rights to subscribe for, Class A Shares representing up to 3% of the Company's issued share capital as at the date of the General
Meeting. [This in order to be aligned with the resolutions approved by the Unibail-Rodamco-Westfield SE 2024 general meeting]. This additional
authorisation is being proposed in order to ensure that the MB, under the SB’s supervision, has sufficient powers to match share issuances
proposed to be authorised by the general meeting of Unibail-Rodamco-Westfield SE which, in turn, secures the continued operation of the Stapled
Share Principle.
5.3.4 AUTHORISATION FOR THE MANAGEMENT BOARD TO LIMIT OR EXCLUDE PRE-EMPTION
RIGHTS
At the General Meeting held June 27, 2023 the MB is authorised, for a period of 18 months following the General Meeting, to resolve, subject to
SB approval and the Stapled Share Principle, to limit or exclude pre-emption rights in relation to any issuance of shares or, or a grant of rights
to subscribe for shares, under the authorisation granted to issue, or to grant rights to subscribe for, Class A Shares representing up to 10% of the
Company's issued share capital and under the authorisation granted to issue, or to grant rights to subscribe for, Class A Shares representing up
to 3% of the Company's issued share capital. Refer to 5.3.3.
5.3.5 SITUATION AS AT DECEMBER 31, 2023
As at December 31, 2023, the URW NV shares held or cancelled by the Company is as follows:
% of URW NV shares held directly or indirectly by URW NV ("treasury shares") as at December 31, 2023
0%
Number of cancelled URW NV shares during the last 24 months
0
Number of treasury shares as at the December 31, 2023
0
5.4 INFORMATION ON THE SHAREHOLDING
5.4.1 OWNERSHIP OF CAPITAL AND VOTING RIGHTS
The Company’s share capital as at December 31, 2023, comprises 139,041,391 class A shares and 93,248,315 class B shares with a nominal value
of €0.50 each and is fully paid-up. The class A shares form part of Stapled Shares together with ordinary URW SE shares. All class B shares are
owned by URW SE; pursuant to the Articles, class B shares can only be held by (i) any entity of the URW Group or (ii) any other party, with the
approval of the MB and the SB.
One single voting right is attached to each URW NV share in accordance with the “one share, one vote” principle.
As at December 31, 2023, 59.86% of the Company's share capital was held by others than URW SE and MB Members.
131
The Company’s shareholding structure was as follows during the last three financial years:
Shareholder
Year-end 2021
Year-end 2022
Year-end 2023
Total number
of shares
% of share capital
% of voting rights
Total number
of shares
% of share capital
% of voting rights
Total number of
shares
% of share capital
% of voting rights
Free float (class A)
118,299,741
51.03
51.03
118,479,905
51,07
51,07
118,752,737
51,12
5,07
URW SE (class B)
93,248,315
40.22
40.22
93,248,315
40.19
40.19
93,248,315
40.14
40.19
Companies controlled
by Mr Xavier Niel (Rock
Investment and NJJ
Holdings)
(1)
20,294,670
8.75
8.75
20,286,422
8.74
8.74
20,286,422
8.73
8.74
Executive officers
(2)
5
0
0
761
0
0
2,232
0
0
Total
231,842,731
232,015,403
232,289,706
Figures may not add up due to rounding.
(1) Based on Mr. Niel’s statement.
(2) Executive officers comprise the MB Members. The numbers do not take into account any units in the URW SE Company Savings Plan held by the executive officers. As at December 31, 2023 the MB
consist of two members.
5.4.2 INFORMATION REGARDING OWNERSHIP THRESHOLD DISCLOSURES
Substantial holding notifications made to the AFM can, once published, be viewed on the website of the Dutch Authority for the Financial Markets
(“AFM”) and threshold disclosures notified to URW SE as required under the Articles of Association are available at the registered office of URW
SE.
To the best of the Company’s knowledge and based on the substantial holding notifications published on the website of the AFM and the threshold
crossings notified to URW SE, the following persons (other than URW SE) have, as at the filing date of this Annual Report, a notifiable interest in
URW NV's share capital.
The AFM register shows the following notifications of substantial share capital and/or voting rights above the 3% threshold: X. Niel: substantial
share capital of 16.20% and 16.20% of the voting rights (May 20, 2022), BlackRock, Inc.: substantial share capital of 4.04% and 4.68% of the voting
rights (March 7, 2024).
5.4.3 SHAREHOLDERS’ AGREEMENT
To the best of the Company’s knowledge there is no shareholders’ agreement.
5.4.4 URW SE'S SHAREHOLDING IN URW NV
URW SE holds approximately 40% of URW NV's issued and outstanding share capital.
PARTICIPATION MAINTENANCE SUBSCRIPTION RIGHT
URW SE wishes to maintain its capital interest and voting rights in URW NV at or slightly above 40%. In connection therewith URW NV granted
URW SE the "Participation Maintenance Subscription Right".
The Participation Maintenance Subscription Right allows URW SE to subscribe, in one or more tranches, on a continuous and revolving basis for
new URW NV class B shares, each time up to the lesser of (i) such maximum number of URW NV class B shares that, as the result of a subscription
to such number of URW NV class B shares by URW SE pursuant to an exercise of the Participation Maintenance Subscription Right, the aggregate
nominal amount of URW NV shares held by URW SE and its subsidiaries is equal to 40.22% of URW NV's issued and outstanding share capital, and
(ii) the maximum number of URW NV's class B shares that may be issued under the authorised share capital of URW NV under its Articles at that
time.
Certain terms and conditions of the Participation Maintenance Subscription Right are set out in a Participation Maintenance Subscription Right
Agreement entered into between URW SE and URW NV on June 4, 2018.
The subscription price for any URW NV class B shares subscribed for by URW SE pursuant to the exercise of the Participation Maintenance
Subscription Right is equal to the par value of such shares or such other price as may be agreed between URW SE and URW NV from time to time.
At least one-fourth of the par value is to be paid up upon subscription and the remaining three-fourths will be payable by URW SE upon URW NV
calling for it, subject to applicable law. Solely at URW NV's option and subject to the Articles and applicable law, all or part of such payment
obligation for the subscribed-for URW NV class B shares may be charged against URW NV's profits and/or reserves.
At the request of the holder, any URW NV class B shares held by URW SE or any of its subsidiaries shall be converted into URW NV class A shares
of equal nominal value in accordance with the Articles and subject to the nominal value of the to-be converted URW NV class B shares having
been fully paid up.
URW SE may assign the Participation Maintenance Subscription Right Agreement, with simultaneous assignment of the Participation Maintenance
Subscription Right, to any wholly-owned URW SE subsidiary.
The Participation Maintenance Subscription Right Agreement is entered into and the Participation Maintenance Subscription Right is granted for
an indefinite period of time, but may be terminated at any time by URW SE.
EQUITY PLAN SATISFACTION SUBSCRIPTION RIGHT
Pursuant to any equity incentive plan, stock option plan, equity saving plan, performance share plan or other plan, as applicable from time to
time, URW SE or any of its subsidiary may award Stapled Shares, or rights to acquire Stapled Shares (including rights to concurrently acquire URW
NV class A shares and URW SE ordinary shares thereby forming Stapled Shares), to (current or former) employees, officers and/or directors of
the URW Group. URW SE or the relevant URW SE subsidiary would need to be able to deliver, transfer or otherwise provide URW NV class A shares
132
(for as long as the Stapled Share Principle applies, as part of Stapled Shares) pursuant to awards made under such equity plans. In connection
therewith URW NV granted URW SE the "Equity Plan Satisfaction Subscription Right".
The Equity Plan Satisfaction Subscription Right allows URW SE to subscribe, in one or more tranches, on a continuous and revolving basis for new
URW NV class A shares, each time up to the lesser of (i) the number of URW NV class A shares that are required or reserved to satisfy any
obligations to issue, transfer, deliver or otherwise provide URW NV class A shares pursuant to awards made under any relevant equity plan, and
(ii) the maximum number of URW NV class A shares that may be issued under the authorised share capital of URW NV under its Articles at that
time.
Certain terms and conditions of the Equity Plan Satisfaction Subscription Right are set out in an Equity Plan Satisfaction Subscription Right
Agreement entered into between URW SE and URW NV on June 4, 2018.
The subscription price for any URW NV class A shares subscribed for by URW SE pursuant to the exercise of the Equity Plan Satisfaction Subscription
Right is equal to the par value of such shares or such higher price as provided for in the relevant equity plan (if any). At subscription, URW SE
shall pay the aggregate nominal value in full. At the request of URW SE, URW NV shall - subject to the approval of the SB and to the extent
permitted under applicable law - charge all or part of such payment obligation against URW NV's profits and/or reserves, in particular in respect
of those equity plans in which shares are provided to the participants without payment of any consideration.
URW SE may assign part of the Equity Plan Satisfaction Subscription Right to any URW SE subsidiary, provided that such URW SE subsidiary has
committed itself towards URW NV to be bound by the Equity Plan Satisfaction Subscription Right Agreement in respect of such assigned part.
Furthermore, URW SE may assign the Equity Plan Satisfaction Subscription Right in respect of such number of URW NV class A shares that are the
subject of an award under an equity plan to the relevant participant to whom such award is or has been made, under the conditions that an
exercise of such assigned Equity Plan Satisfaction Subscription Right by such participant may only be made in compliance with all terms and
conditions (including vesting conditions) of the relevant equity plan and award, and that an issue of URW NV class A shares to such participant
can only be made simultaneously with an issue or transfer of an equal number of URW SE ordinary shares to such participant and URW SE having
confirmed to URW NV that such simultaneous issue or transfer will occur.
The Equity Plan Satisfaction Subscription Right Agreement further provides that in situations in which URW SE or a URW SE subsidiary is making
an award to any employee, officer or director of the URW Group with respect to a number of URW SE ordinary shares under an equity plan of
URW SE or any URW SE subsidiary, URW SE may request that URW NV simultaneously grant a right to such employee, officer or director with
respect to an equal number of URW NV class A shares. URW NV shall in such cases - to the extent legally permissible - make such a grant, under
the condition that an issue of URW NV class A shares to such employee, officer or director can only be made simultaneously with an issue or
transfer of an equal number of URW SE ordinary shares to such employee, officer or director and URW SE having confirmed to URW NV that such
simultaneous issue or transfer will occur.
The Equity Plan Satisfaction Subscription Right Agreement is entered into and the Equity Plan Satisfaction Subscription Right is granted for an
indefinite period of time, but may be terminated at any time by URW SE and will terminate upon the Articles being amended such that there are
no longer Stapled Shares. Upon termination, the agreement and subscription right will survive to the extent necessary to settle existing
outstanding awards under any relevant equity plans.
5.5 ARTICLES OF ASSOCIATION OF THE COMPANY AND CHARTERS
OF THE CORPORATE BODIES
The main statutory provisions are given hereafter. Furthermore, the Management Board (the “MB”), Supervisory Board (the “SB”), Audit
Committee (the “AC”), the Investment Committee (the “IC”) and the Governance, Nomination and Remuneration Committee (the “GNRC”) each
have their own internal charters. The Articles of Association (the “Articles”) and internal charters of these committees are available on the
Company’s website or at its registered office.
The Articles were last updated on June 30, 2021.
5.5.1 CORPORATE PURPOSE
(ARTICLE 3 OF THE ARTICLES OF ASSOCIATION)
The corporate purpose of the Company is in the Netherlands and abroad:
• to invest in assets, primarily through the direct or indirect acquisition of real estate, in such a manner that the ensuing risks are
spread in order to allow shareholders to share in the proceeds;
• to enter into cash pooling arrangements with, to provide financing to and to furnish guarantees for the benefit of URW SE and other
affiliated bodies of the Company whose assets, on a consolidated basis, generally at least nearly exclusively consist of real estate
and/or associated rights;
• to incorporate, to participate in, to hold any other interest in and to conduct the management or supervision of bodies whose
objects and actual activities are to invest in assets;
• to incorporate, to participate in and to conduct management of bodies whose objects and actual activities, besides possibly
investing assets, are to develop real estate for the benefit of itself or certain bodies;
• to invest in the improvement or expansion of real estate;
• to acquire, to manage, to invest, to exploit, to encumber and to dispose of other assets and liabilities and to provide any other act
or service; and
• to do anything which, in the widest sense, is connected with or may be conducive to the objects described above,
in each case taking into account the restrictions applicable to the Group under the fiscal investment institution regime as laid down in section
28 of the Corporate Income Tax Act (CITA), or such statutory provision which replaces section 28 CITA.
133
5.5.2 STAPLED SHARE PRINCIPLE
(ARTICLE 6 OF THE ARTICLES OF ASSOCIATION)
The shares in URW NV are in registered form. The shares have been, or will be, created under Dutch law and must be paid up in full upon issuance
(without prejudice to section 2:80(2) Dutch Civil Code (the “DCC”)). However, it may be stipulated that up to 75% of the nominal value of a class
B share need not be paid up until URW NV has called for payment.
The class A shares may be included in a giro deposit (“girodepot”) or a collective deposit (“verzameldepot”) in accordance with the provisions
of the Dutch Giro Securities Act or any other collection of securities which are transferable by means of book-entry, in each case with due
observance of the Stapled Share principle set out in the Articles.
Each class B share can be converted into one class A share. By means of a written request addressed to the MB, the holder of one or more class
B shares may request the conversion of all or part of his class B shares into an equal number of class A shares. Such request must indicate the
number of class B shares to be converted. Upon receipt of such request, the MB, with the approval of the SB, shall resolve to convert the number
of class B shares specified in the request into an equal number of class A shares. Neither the MB nor URW NV are required to effect a conversion
of class B shares if the request does not include the number of class B shares to be converted or if the MB reasonably believes that the information
included in such request is untrue or incorrect or that the holder concerned is not a party meeting the quality requirement described below.
Under the Articles, in order to achieve a situation where holders of class A shares, other than any entity of the URW Group, hold an interest in
both URW NV and URW SE, as if they held an interest in a single (combined) company:
• no class A share can be (i) issued to, or subscribed for by, others than any entity of the URW Group, (ii) transferred to or, subject
to applicable law, pledged or otherwise encumbered by others than any entity of the URW Group, or (iii) released from any
encumbrance by others than any entity of the URW Group, in each case except together with a UR Share in the form of a Stapled
Share;
• no right to subscribe for one or more class A shares can be (i) granted to or exercised by others than any entity of the URW Group,
(ii) terminated by others than any entity of the URW Group, (iii) transferred to or, subject to applicable law, pledged or otherwise
encumbered by others than any entity of the URW Group, or (iv) released from any encumbrance by others than any entity of the
URW Group, in each case except together with a corresponding right to subscribe for an equal number of URW SE Shares in the
form of an equal number of Stapled Shares;
• all shareholders, other than any entity of the Stapled Group, must refrain from (i) acquiring any class A share, (ii) acquiring,
exercising or terminating any right to subscribe for one or more class A shares, or (iii) creating or acquiring a usufruct, pledge or
other encumbrance over any class A share or any right to subscribe for one or more class A shares, in each case except (if it
concerns a class A share) together with a URW SE share in the form of a Stapled Share or (if it concerns a right to subscribe for one
or more class A shares) together with a corresponding right to subscribe for an equal number of URW SE shares in the form of an
equal number of Stapled Shares; and
• subject to applicable law, the MB and the SB shall take all necessary actions to ensure that, at all times, the number of class A
shares issued and held by others than any entity of the URW Group is equal to the number of URW SE shares issued and held by
others than any entity of the URW Group.
The Stapled Share principle can only be terminated by virtue of a resolution passed by the General Meeting to amend the Articles. A resolution
by the General Meeting to effect such an amendment shall only become effective after the MB, with the approval of the SB, has confirmed that
the General Meeting or shareholders or URW SE has passed a resolution to terminate the Stapled Share principle as included in the Articles of
URW SE.
In addition, under the Articles, class B shares can only be held by any entity of the URW Group or any other party, with the prior approval of the
MB and the SB. If one or more class B shares are not, or no longer, held by a party which meets the quality requirements described in the previous
sentence:
• the holder of such class B shares must immediately notify the MB thereof, consistent with the arrangements described in the
Articles;
• such Shareholder's voting rights, meeting rights and rights to receive distributions attached to its class B shares shall be suspended;
and
• such Shareholder must immediately offer and transfer its class B shares to URW NV (or to a party designated in writing by URW NV)
in accordance with the provisions in the Articles.
• the MB, with the approval of the SB, may grant dispensation from the quality requirement described above.
Except as set forth above or as described elsewhere in this report, as at December 31, 2023, URW NV imposed no limitation, under its Articles
or by contract, on the transfer of shares (or depository receipts for shares issued with URW NV's cooperation), the exercise of voting rights on
shares, periods for exercising such voting rights or the issuance of depository receipts for Shares with URW NV's cooperation.
All shareholders of the Company must comply with the Stapled Share principle described above. If a shareholder, other than any entity of the
URW Group, would hold one or more "Unstapled Shares" (i.e., class A shares held by a shareholder, other than any entity of the URW Group, if
such shareholder does not also hold the corresponding ordinary shares in UR in the form of Stapled Shares) for whatever reason:
• such shareholder must immediately notify the MB of such breach, consistent with the arrangements described in the Articles;
• such shareholder must immediately offer and transfer its Unstapled Shares to URW SE (or any other entity of the URW Group
designated in writing by URW SE);
• if such shareholder has not, within a reasonable period of no more than fourteen (14) days after having become obliged to offer
and transfer its Unstapled Shares, complied with such obligation, URW NV shall be irrevocably authorised to offer and transfer the
Unstapled Shares concerned to URW SE (or any other entity of the URW Group designated in writing by URW SE) on behalf of such
shareholder in accordance with the provisions in the Articles; and
• such shareholder's voting rights, meeting rights and rights to receive distributions attached to its Unstapled Shares shall be
suspended for as long as such shareholder (or URW NV on such shareholder's behalf) has not complied with the obligation of such
Shareholder to offer and transfer such Unstapled Shares as described above.
If the holder of a Stapled Share must notify URW SE in respect of its shares in the capital of URW SE pursuant to the articles of association of
URW SE and/or applicable French law, such shareholder must also immediately notify URW SE in accordance with the arrangements described in
the Articles. If the MB becomes aware that a shareholder has failed to comply with that obligation, the MB, with the approval of the SB, may
demand that such shareholder comply with such obligation within a reasonable period of no more than 14 days, as stipulated in such notice. For
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as long as the shareholder concerned has not complied with such obligation after the expiration of the period stipulated in said notice, such
Shareholder's voting rights, meeting rights and rights to receive distributions attached to its class A shares shall be suspended.
Furthermore, under Dutch law, various protective measures are possible and permissible within the boundaries set by Dutch law, including Dutch
case law. In this respect, certain provisions of the Articles may make it more difficult for a third party to acquire control of the Company or
effect a change in the MB and/or SB. These include:
• the Stapled Share principle described in paragraph 5.5.2;
• a provision that the General Meeting can only appoint MB Members and SB Members on the basis of a nomination by (i) the SB
pursuant to
• and in accordance with a binding recommendation by the GNRC, (ii) the Chairman, (iii) a Controlling Shareholder or (iv) the Class
B Meeting, in each case provided that the names of those candidates are stated for that purpose in the agenda of that General
Meeting or the explanatory notes thereto; and
• a requirement that certain matters, including an amendment of the Articles, may only be brought to the General Meeting for a
vote upon a proposal by the MB, with the approval of the SB.
5.5.3 CORPORATE GOVERNANCE STRUCTURE
(ARTICLES 16 TO 26 OF THE ARTICLES OF ASSOCIATION)
The Company is managed by a Management Board (“MB”) and a Supervisory Board (“SB”). Details of the composition and the functioning of the
MB and the SB are set out in Section 2.1 of this Annual Report.
5.5.3.1 THE MANAGEMENT BOARD
(ARTICLES 16 TO 21 OF THE ARTICLES OF ASSOCIATION AND MANAGEMENT BOARD RULES)
The MB is the collegial decision-making body of URW NV. Pursuant to the Articles, the MB shall be composed of individuals or entities and the SB
shall determine the number of MB Members. The SB Chair shall, with due observance of the MB Rules, designate one MB Member as Chief Operating
Officer US (“COO US”), and may revoke such designation from time to time. The MB consisted of two members as at December 31, 2023.
The MB is charged with management of the Company, subject to the restrictions contained in the Articles. The MB is required to provide the SB
with the information necessary for the performance of its tasks in a timely fashion. At least once a year, the MB shall inform the SB in writing of
the main features of the strategic policy, the general and financial risks and the administration and control system of URW NV. The MB’s mission
consists in developing and executing the Company’s strategy, effectively structuring and staffing the Company to ensure its efficient functioning,
achieving the projected financial results and communicating these results in the best manner. In performing their duties, MB members shall be
guided by interests of the Company and of the business connected with it.
The MB is responsible for the day-to-day management of the Company which includes, among other things, formulating strategies and policies,
and setting and achieving the Company's objectives. The SB supervises and advises the MB. In performing their duties, MB and SB members shall
be guided by the interests of the Company and of the business connected with it.
The General Meeting shall appoint the MB Members and can only appoint a MB Member upon a nomination by (i) the SB pursuant to and in
accordance with a binding recommendation by the GNRC, (ii) the Chair, (iii) a Controlling Shareholder or (iv) the class B Meeting, in each case
provided that the names of those candidates are stated for that purpose in the agenda of that General Meeting or the explanatory notes thereto.
A MB Member is appointed or reappointed for a term which shall expire immediately following the end of the annual General Meeting held in any
of the first four years following his appointment or reappointment (as relevant).
The General Meeting may at any time suspend or dismiss any MB Member. In addition, the SB may at any time suspend a MB Member. The SB shall
not make any proposal, or approve any proposal made by the MB, for the suspension or dismissal of a MB Member and shall not resolve upon the
suspension of a MB Member, other than pursuant to and in accordance with a binding recommendation either by the SB Chair or by the GNRC. A
suspension by the SB can at any time be lifted by the General Meeting. If a MB Member is suspended and the General Meeting does not resolve
to dismiss him within three months from the date of such suspension, the suspension shall lapse.
5.5.3.2 THE SUPERVISORY BOARD
(ARTICLES 22 TO 26 OF THE ARTICLES OF ASSOCIATION AND THE SUPERVISORY BOARD RULES)
The SB exercises permanent oversight and control over the MB and the general affairs of the Company as provided by law, the Articles and its SB
Rules. The SB has 5 members appointed for a term of four years. The SB must comprise of two URW SE Supervisory Directors. “URW SE Supervisory
Directors” refers to an SB member who is also a member of the management board, a member of the supervisory board or an employee of (x)
URW SE (or any of the legal successors) or (y) any controlled undertaking whose financial information is included in the consolidated financial
reporting of URW SE (excluding the Company and its subsidiaries within the meaning of section 2:24a of the Dutch Civil Code).
The SB is charged with the supervision of the policy of the MB and the general course of affairs of URW NV and of the business connected with
it. The SB shall provide the MB with advice. In performing their duties, SB Members shall be guided by the interests of URW NV and of the business
connected with it.
The SB consists of at least two, but no more than seven, SB Members. The SB shall be composed of individuals. The SB shall determine the number
of SB Members. The SB must comprise such number of URW SE Supervisory Directors as equals the highest integer that is less than 50% of all SB
Members in office. This requirement can be set aside by the General Meeting with a majority of at least two-thirds (2/3) of the votes cast
representing more than half of URW NV's issued share capital.
The SB shall elect an URW SE Supervisory Director to be the Chair and another URW SE Supervisory Director to be the vice-Chair, in each case
pursuant to and in accordance with a recommendation by the GNRC. The SB may dismiss the SB Chair or the vice-Chair pursuant to and in
accordance with a recommendation by the GNRC, provided that the URW SE Supervisory Director so dismissed shall subsequently continue his
term of office as a URW SE Supervisory Director without having the title of Chair or vice-Chair, as the case may be.
The General Meeting can only appoint a SB Member upon a nomination by (i) the SB pursuant to and in accordance with a binding recommendation
by the GNRC, (ii) the Chair, (iii) a Controlling Shareholder or (iv) the class B Meeting, in each case provided that the names of those candidates
are stated for that purpose in the agenda of that General Meeting or the explanatory notes thereto and taking into account the requirement with
respect to the requisite number of URW SE Supervisory Directors. A SB Member may be appointed or reappointed for a term which shall expire
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immediately following the end of the annual General Meeting held in any of the first four years following his appointment or reappointment (as
relevant). The General Meeting may at any time suspend or dismiss any SB Member. The SB shall not make any proposal, or approve any proposal
made by the MB, for the suspension or dismissal of a SB Member, other than pursuant to and in accordance with a binding recommendation either
by the SB Chair or by the GNRC. If a SB Member is suspended and the General Meeting does not resolve to dismiss him within three months from
the date of such suspension, the suspension shall lapse.
The SB has three committees: the AC, the GNRC and IC.
THE SPECIALISED COMMITTEES OF THE SUPERVISORY BOARD
Three specialised committees are responsible for assisting the Board to carry out its duties: the Audit Committee, the Governance, Nomination
and Remuneration Committee and Investment Committee. All SB Members participate in one of these committees. The committees function
under separate internal charters.
Details of the composition, missions and diligences of the committees are set out in Section 2.2.3 of this Annual Report.
5.5.4 GENERAL MEETINGS
(ARTICLES 28 TO 32 OF THE ARTICLES OF ASSOCIATION)
General meetings must be held in Amsterdam, The Hague, Rotterdam or Schiphol (Haarlemmermeer). Certain resolutions can only be passed by
the General Meeting at the proposal of the MB, with the approval of the SB.
5.5.4.1 FUNCTIONING OF THE GENERAL MEETING
General meetings must be held in Amsterdam, The Hague, Rotterdam or Schiphol (Haarlemmermeer). The annual General Meeting must be held
at least once a year, no later than in June. Within three months after the MB has considered it to be likely that URW NV's equity has decreased
to an amount equal to or lower than half of its paid up and called up capital, a General Meeting will be held in order to discuss the measures to
be taken if so required. Extraordinary General Meetings shall further be held whenever the MB, the SB or the Chairman so decides, provided in
each case that any item proposed by the Chairman for discussion or voting at any General Meeting shall be included as such on the agenda for
such General Meeting.
In addition, one or more Shareholders and other Persons with Meeting Rights, who solely or jointly represent at least ten percent (10%) of URW
NV's issued capital, may request the MB and the SB that a General Meeting be convened. The request must set out in detail the matters to be
discussed. If neither the MB nor the SB has taken the steps necessary to hold a General Meeting within 8 weeks after such request, the requesting
person(s) may be authorised by the court in preliminary relief proceedings to convene a General Meeting. If the requesting person(s) include(s)
at least one holder of one or more class B shares, he/they may convene a General Meeting after such 8 weeks period without such prior
authorisation by the court.
Notice of a General Meeting must be given by at least such number of days prior to the day of the meeting as required by Dutch law, which is
currently 42 days. The convocation of the General Meeting must be published through an announcement by electronic means. The notice must
include the items for discussion and voting, the time and place of the meeting, the record date, the manner in which Persons with Meeting Rights
may register and exercise their rights, the cut-off time for registration for the meeting, and such other matters as required by applicable law
(also depending on the nature of the agenda items for the meeting concerned). In addition, Shareholders may be convened for the General
Meeting by means of letters sent to their addresses as set out in URW NV's shareholders register (if and to the extent they are registered directly
in such register).
The convening notice shall also include such items as one or more Shareholders and other Persons with Meeting Rights, representing - individually
or collectively - at least such part of URW NV's issued share capital as prescribed by Dutch law (currently 3%), have requested URW NV by a
motivated request (or, if it concerns a matter which falls within the powers of the General Meeting, a proposal for a resolution) to include in the
agenda, at least 60 days before the day of the General Meeting. No resolutions may be adopted on items other than those which have been
included in the agenda.
The General Meeting shall be chaired by one of the following individuals, taking into account the following order of priority (i) by the Chair, if
there is a Chair and he is present at the General Meeting, (ii) by another SB Member who is chosen by the SB Members present at the General
Meeting from their midst, (iii) by an MB Member who is chosen by the MB Members present at the General Meeting from their midst, or (iv) by
another person appointed by the General Meeting. The person who should chair the General Meeting set out in the preceding sentence may
appoint another person to chair the General Meeting.
Each Shareholder and other Person with Meeting Rights may attend the General Meeting, address the General Meeting and exercise voting rights
pro rata to his shareholding, either in person or by proxy, provided that his meeting, and - if relevant - voting, rights have not been suspended.
Shareholders and other Person with Meeting Rights may exercise these rights, if they are the holder of such right on the record date as required
by Dutch law, which is currently the 28th day prior to the day of the General Meeting, and they or their proxy have notified URW NV of their
identity and their intention to attend the General Meeting in writing at the address and by the seventh day prior to the General Meeting or such
other date specified in the notice of the General Meeting.
MB Members and SB Members may attend a General Meeting. In these General Meetings, they have an advisory vote. The chairman of the General
Meeting may decide at his discretion to admit other persons to the General Meeting.
5.5.4.2 POWERS OF THE GENERAL MEETING
All powers that do not vest in the MB or the SB pursuant to applicable law, the Articles or otherwise, vest in the General Meeting. The main
powers of the General Meeting include, subject in each case to the applicable provisions in the Articles:
• the appointment, suspension and dismissal of Managing Directors and Supervisory Directors;
• the approval of certain resolutions of the MB concerning a material change to the identity or the character of URW NV or its
business;
• the reduction of URW NV's issued share capital through a decrease of the nominal value, or cancellation, of shares;
• the adoption of URW NV's statutory annual accounts;
• the appointment of the Dutch independent auditor to examine URW NV's statutory annual accounts;
• amendments to the Articles;
• approving a merger or demerger by URW NV, without prejudice to the authority of the MB to resolve on certain types of mergers
and demergers if certain requirements are met; and
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• the dissolution of URW NV.
In addition, the General Meeting has the right, and the MB and the SB must provide, any information reasonably requested by the General
Meeting, unless this would be contrary to an overriding interest of URW NV.
5.5.4.3 SHAREHOLDER RIGHTS
Each share confers the right to cast one vote in the General Meeting. Pursuant to Dutch law, no votes may be cast at a General Meeting, inter
alia, in respect of shares that are held by URW NV or a subsidiary of URW NV.
Resolutions of the General Meeting are passed by simple majority of the votes cast, except where Dutch law or the Articles provide for a larger
majority. Resolutions of the General Meeting can only be adopted if at least 20% of URW NV's issued share capital is represented at the General
Meeting, except where Dutch law provides for a higher quorum. A second meeting as referred to in section 2:120(3) DCC cannot be convened.
Shareholders, irrespective of whether or not they have voting rights, have meeting rights under Dutch law (including the right to attend and
address the General Meeting, subject to the concept of a record date and the requirement to register for General Meeting as described in chapter
5.4.4.1).
Furthermore, each share carries an entitlement to dividends and other distributions as set forth in the Articles. Pursuant to the Articles, any
such dividend or other distribution shall be payable on such date and, if it concerns a distribution in cash, such currency or currencies as
determined by the MB with the approval of the SB. Any dividends that are paid to Shareholders through Euroclear France will be automatically
credited to the relevant Shareholders' accounts without the need for such Shareholders to present documentation proving their ownership of the
shares. Payment of dividends on the shares in registered form (not held through Euroclear France, but directly) will be made directly to the
relevant Shareholder using the information contained in URW NV's Shareholders' register and records. At the proposal of the MB with the approval
of the SB, the General Meeting may resolve that a distribution, instead of being made in cash, shall be made in the form of Shares or in the form
of URW NV's assets.
5.5.4.4 CLASS MEETINGS
A Class Meeting shall be held whenever a resolution of that Class Meeting is required by Dutch law or under the Articles and otherwise whenever
the MB, the SB or the Chair so decides. With respect to Class A Meetings, the above descriptions in respect of convening of, drawing up of the
agenda for, holding of and decision-making by the General Meeting apply equally.
5.5.5 REQUIREMENTS PERTAINING TO THE DISTRIBUTION OF PROFITS
(ARTICLE 38 OF THE ARTICLES OF ASSOCIATION)
Pursuant to the Articles, the profits shown in URW NV's annual accounts in respect of a financial year shall be appropriated as follows, and in the
following order of priority:
• the MB, with the approval of the SB, shall determine which part of the profits shall be added to URW NV's reserves, taking into
account the fiscal rules and regulations applicable to URW NV from time to time; and
• the remaining profits shall be at the disposal of the General Meeting.
A distribution of profits shall be made by URW NV after the adoption of the annual accounts that show that such distribution is allowed.
The MB, with the approval of the SB, may resolve to make interim distributions, provided and to the extent that it appears from interim accounts
to be prepared in accordance with section 2:105(4) DCC that URW NV's equity exceeds the amount of the paid up and called up part of its capital
plus the reserves which must be maintained by law.
At the proposal of the MB, with the approval of the SB, the General Meeting is authorised to resolve to make a distribution from URW NV's
reserves.
5.5.6 SHARES CARRYING LIMITED ECONOMIC ENTITLEMENT
(ARTICLE 36 OF THE ARTICLES OF ASSOCIATION)
Under the Articles, distributions shall be made in proportion to the aggregate number of shares held. There are no shares which, pursuant to the
Articles, carry a limited entitlement to the profits or reserves in URW NV.
5.5.7 AMENDMENTS TO THE ARTICLES OF ASSOCIATION
At the proposal of the MB with the approval of the SB, the General Meeting may resolve to amend the Articles. A proposal to amend the Articles
must be included in the agenda of the General Meeting. A copy of the proposal, containing the verbatim text of the proposed amendment, must
be deposited with URW NV for the inspection (free of charge) by any shareholder from the date on which notice of the meeting is given until the
end of the General Meeting. Furthermore, a copy of the proposal will be made available free of charge to shareholders and other Persons with
Meeting Rights from the day it was deposited until the day of the meeting.
A resolution of the General Meeting to amend the Articles requires a majority of at least two-thirds (2/3rd) of the votes cast (subject to the 20%
quorum requirement described in section 5.5.4.3). In addition, amendments to provisions in the Articles referencing the Stapled Share principle,
require the prior approval of the class meeting formed by holders, and others with meeting rights with respect to, class B shares. A resolution to
amend the Articles to effect the termination of such Stapled Share principle shall only become effective after the MB, with the approval of the
SB, has confirmed that the General Meeting of shareholders of URW SE has passed a resolution to terminate such Stapled Share principle as
included in the articles of association of URW SE.
5.6 BRANCHES
URW NV has no branch offices.
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5.7 INVESTMENT BY THE COMPANY OUTSIDE THE GROUP
The Company has not made any significant investment outside the Group during the financial year ending December 31, 2023.
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ADDITIONAL INFORMATION
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6.1 STATEMENT OF THE PERSONS RESPONSIBLE FOR THE
ANNUAL REPORT
In accordance with Article 5.25c(2)(c) of the Dutch financial markets supervision act (Wet op het Financieel Toezicht) and the Dutch Corporate
Governance Code section 1.4.3 the members of the Management Board of URW NV confirm that to the best of their knowledge that:
• The 2023 financial statements included in this Annual Report are prepared in accordance with IFRS as adopted for use in the
European Union and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and its
consolidated subsidiaries taken as a whole;
• The management report included in this Annual Report gives a fair view of the development and performance of the business, the
results and of the financial situation of the Company and its consolidated subsidiaries taken as a whole and describes the main risks
and uncertainties to which they are exposed;
• This report provides sufficient insight into any failings in the effectiveness of the risk management and control systems;
• The management and control systems provide reasonable assurance that the financial reporting does not contain material
inaccuracies;
• Based on current state of affairs as at the date of this report, it is justified that the financial reporting is prepared on a going
concern basis;
• This report states those material risks and uncertainties that are relevant to the expectation of the Company's continuity for a
period of twelve months after the date of this report.
Schiphol, March 19, 2024
On behalf of the Management Board
Dominic Lowe Gerard Sieben
Chief Operating Officer US Chief Financial Officer
6.2 AUDITORS
The Statutory Auditor of the Company is:
Deloitte Accountants B.V.
Gustav Mahlerlaan 29700
1081 LA Amsterdam, the Netherlands
Mr Jef Holland
Commencement date of the first term: June 22, 2022
Commencement date of the second term: June 27, 2023
Previous Statutory Auditor of the Company:
Ernst & Young Accountants LLP (Netherlands)
Euclideslaan 1
3584 BL Utrecht, the Netherlands
Mr Wim Kerst
Commencement date of the first term: June 1, 2018.
Commencement date of the second term: June 11, 2020.
Commencement date of the third term: June 9, 2020.
Commencement date of the fourth term: June 29, 2021.
6.3 INDEPENDENT APPRAISERS
URW NV's portfolio was valued by the below-mentioned independent appraisers.
Jones Lang LaSalle B.V.
Valuation Advisory
P.O. Box 75208
1070 AE Amsterdam
The Netherlands
Cushman & Wakefield, Inc.
1290 Avenue of the Americas
New York, NY 10104
United States
Kroll, LLC
311 South Wacker Drive, Suite 4200
Chicago Il 60045
USA
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6.4 DOCUMENTS AVAILABLE TO THE PUBLIC
This Annual Report may be obtained, free of charge, at URW NV at Schiphol Boulevard 315 Tower F, 1118 BJ Schiphol (Haarlemmermeer), the
Netherlands, and, where appropriate, on the website of URW NV (https://www.urw-nv.com/en/investors
).
6.5 GLOSSARY
Articles: refer to the articles of association of URW NV.
Average cost of debt: recurring financial expenses (excluding the ones on financial leases and the ones related to partners’ current accounts) +
capitalised financial expenses (excluding non-recurring financial expenses such as mark-to-market and termination costs of financial instruments
including bonds repurchased, currency impact) / average net debt over the period.
CAM: Common Area Maintenance.
Committed projects: projects for which the Group owns the land or building rights and has obtained all necessary administrative authorisations
and permits, approvals of joint venture partners (if applicable), approvals of the Group’s internal governing bodies to start superstructure
construction works and on which such works have started.
Debt Yield: Ratio of the net operating income to the outstanding loan amount, net of certain cash as defined in the relevant mortgage loan
documentation.
Discount Rate (DR): the rate used in a Discounted Cash Flow model to calculate the present value of future cash flows (positive or negative)
that is to say converting such future cash-flows in today’s monetary value.
EBITDA: Recurring Net Operating result before depreciation and impairment of assets.
Exit Cap Rate (ECR): the rate used to estimate the resale value of a property at the end of the holding period. The expected Net Rental Income
(NRI) per year is divided by the ECR (expressed as a percentage) to get the terminal value.
Financial statements under IFRS: the Group’s consolidated financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS) as applicable in the European Union as at closing date.
Financial statements on a proportionate basis: they are prepared based on the financial statements under IFRS, except for the joint-controlled
entities, which are consolidated on a proportionate basis, instead of being accounted for using the equity method (as applicable under IFRS).
Unibail-Rodamco-Westfield believes that these financial statements on a proportionate basis give to stakeholders a better understanding of the
underlying operations of URW and the joint-controlled entities, as they represent a significant part of the Group’s operations in the US.
Flagships: assets of a certain size and/or with footfall in excess of 10 million per year, substantial growth potential for the Group based on their
appeal to both retailers and visitors, iconic architecture or design and a strong footprint in their area.
Foreclosure: the action of a lender seeking to take the collateral on a loan when loan payments are not made, leading to a transfer of the asset
and the extinction of the corresponding mortgage debt.
Funds From Operations (FFO): on an annualised basis, the recurring EBITDA minus (i) recurring net financial expenses and (ii) tax on recurring
operating result.
Group Share: the part that is attributable to the Group after deduction of the parts attributable to the minority interests.
Interest Cover Ratio (ICR): Recurring EBITDA/Recurring Net Financial Expenses (including capitalised interest); Recurring EBITDA is calculated
as total recurring operating results and other income less general expenses, excluding depreciation and amortisation.
Like-for-like Net Rental Income (Lfl NRI): Net Rental Income excluding acquisitions, divestments, transfers to and from pipeline (extensions,
brownfields or redevelopment of an asset when operations are stopped to enable works), all other changes resulting in any change to the square
meters and currency exchange rate differences in the periods analysed.
Loan-to-Value (LTV): net financial debt, excluding current accounts with non-controlling interests/total assets (whether under IFRS or on a
proportionate basis), including or excluding transfer taxes and excluding goodwill not justified by fee business.
Minimum Guaranteed Rent uplift (MGR uplift): difference between new MGR and indexed old MGR. Indicator calculated on renewals and
relettings only.
Net Disposal Price (NDP): Total Acquisition Cost incurred by the acquirer minus all transfer taxes and transaction costs.
Net Initial Yield (NIY): annualised contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses,
divided by the asset value net of estimated transfer taxes and transaction costs. Shopping centres under refurbishment or not controlled by the
Group and the Westfield trademark are not included in the calculation of NIY.
Net Initial Yield on occupied space: annualised contracted rent (including latest indexation) and other incomes for the next 12 months, net of
operating expenses, divided by the value of occupied space net of estimated transfer taxes and transaction costs. Assets under development are
not included in this calculation.
Non-recurring activities: non-recurring activities include valuation movements, disposals, mark-to-market and termination costs of financial
instruments, bond tender premiums, impairment of goodwill or recognition of negative goodwill, amortisation of fair value of assets and liabilities
recorded for the purpose of purchase price allocation, as well as costs directly incurred during a business combination and other non-recurring
items.
Occupancy Cost Ratio (OCR): (rental charges + service charges including marketing costs for tenants, all including VAT)/(tenants’ sales, including
VAT). As tenant turnover is not known for all tenants for the Netherlands, no reliable OCR can be calculated for this country. Primark sales are
estimates.
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Potential Yield: annualised contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses + the
ERV of vacant space, divided by the asset value net of estimated transfer taxes and transaction costs. Shopping centres under refurbishment or
not controlled by the Group and the Westfield trademark are not included in the calculation of NIY.
SBR: Sales Based Rent.
Secured debt ratio: Secured debt/Total assets.
Tenant sales: performance in the Group’s shopping centres (excluding the Netherlands) in operation, including extensions of existing assets, and
excluding deliveries of new brownfield projects, acquisition of new assets and assets under heavy refurbishment.
Total Acquisition Cost (TAC): the total amount a buyer shall pay to acquire an asset or a company. TAC equals the price agreed between the
seller and the buyer plus all transfer taxes and transaction costs.
Total Investment Cost (TIC): Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion
date and includes: land costs, construction costs, study costs, design costs, technical fees, tenant fitting-out costs paid for by the Group, letting
fees and related costs, eviction costs and vacancy costs for renovations or redevelopments of standing assets; and (ii) opening marketing
expenses. It excludes: (i) step rents and rent-free periods; (ii) capitalised financial interests; (iii) overhead costs; (iv) early or lost Net Rental
Income; and (v) IFRS adjustments.
Unencumbered leverage ratio: unencumbered assets/unsecured debt.
Valuation of occupied office space: valuation based on the appraiser’s allocation of value between occupied and vacant spaces.
Yield impact: the change in potential yields (to neutralise changes in vacancy rates and taking into account key money.
Yield on cost: URW share of the expected stabilised Net Rental Income divided by the URW Total Investment Cost increased by rent incentives
(step rents and rent-free periods), and for redevelopment project only, the Gross Market Value of the standing asset at the launch of the project.