JPM sees macro threats for mall operators Unibail, Klepierre

Klepierre SA

28/09/2023 07:55

** J.P.Morgan expects macroeconomic headwinds and deflation
risk in 2024 to weigh on mall operators despite their solid
post-pandemic performance
    ** The broker has surveyed over 5,000 people across Britain,
U.S., France, Spain and Germany on the cost of living crisis,
with little in the responses to contradict its cautious stance
on the sub-sector
    ** The most popular response to how the surveyed people
might cut back on clothing and footwear was to "buy fewer
items", JPM says
    ** From French responders, 49% expect non-essential spending
to trend down in the coming 12 months, the broker says
    ** For Unibail-Rodamco-Westfield  URW.PA  ("underweight"),
the broker says its U.S. disposal, potential divided resumption
next year and operational outlook will be key drivers over the
coming year
    ** "We do not see FY23 as a trough in NAV or EPS as the
impact of a US sale will not be felt until 2024 and we continue
to question structural drivers for shopping malls," JPM adds on
URW
    ** It also maintains "underweight" on French rival Klepierre
 LOIM.PA  and remains cautious into Q3 results
    ** Investors are potentially underestimating Klepierre's
tougher rental income year-on-year vs unaffected post-pandemic
H2 2022, JPM says

 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))