Download Integrated Annual Report 2019 Asset 3

Adding value
to everyday life

download Integrated Annual Report 2019 Asset 3

At Wereldhave, we believe that everyone deserves to have a comfortable, well-balanced everyday life. No ifs. No buts. End of story.

And we play our part by creating best-in-class Full Service Centers. Centers for a better everyday life. How do we do this? By creating a new category in commercial real estate; one that helps customers run their daily lives more easily and makes everyday life comfortable and joyful. With our LifeCentral transformation program, we focus on creating the right balance on the four customer need areas that make every day count.

2019 at a glance

About Wereldhave – make every day count

Wereldhave Full Service Centers contribute to a more joyful and comfortable everyday life. A one-stop location for groceries, shopping, leisure, relaxation, sports, health, work and other daily needs – all supported by smart concepts and digital services. By investing sustainably to meet the needs of customers and local areas, we enrich communities, while caring for the environment, and have a positive effect on the way people live, work and shop. Wereldhave Full Service Centers play a vital role in people’s everyday lives in leading regional cities in the Netherlands, Belgium and France.

KPI's

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Message from our CEO

“Shareholders cannot be satisfied with the returns Wereldhave has delivered over the past few years. Although we posted strong operational results, our indirect result for 2019 was heavily affected by negative property revaluations, particularly in the Netherlands and France. These revaluations reflect the market reality of a harsh retail landscape.”

“I am proud of our local teams, who managed to produce a relatively strong result, in challenging operational markets. Despite several bankruptcies, the Dutch team managed to keep occupancy high. Adjusted for Hudson's Bay and Sportsworld, l-f-l rental growth would have been +0.8%. In Belgium, strong performance continues and the 5% growth in footfall is particularly impressive, particularly as two large Carrefour units were successfully repositioned in 2019. Retail sales growth of >1% in France is a result of significant operational improvements in the second half of 2019. The strong local teams on the ground in my view lay the perfect foundation for our transformation strategy.”

Matthijs Storm
CEO Wereldhave N.V.

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LifeCentral – our strategy

Tomorrow’s commercial real estate will be about far more than just retail and locations. At Wereldhave, we see opportunities in enabling people to live their daily lives to the full. People living today in densely-populated suburban areas are extremely busy. Finding the right balance in their hectic schedules is a daily challenge. Our Full Service Platforms, consisting of Full Service Centers and smart digital services, will contribute to people feeling happy and comfortable in daily lives.

LifeCentral: every day made more rewarding for consumers
With our LifeCentral program, we’re converting our locations to Full Service Centers to help people achieve a better balance in life. These centers go beyond traditional shopping – they offer a mix of food & drink, healthcare, entertainment and leisure, as well as retail.

Our aim is to make every day more rewarding for consumers, business smarter for tenants and returns stronger for investors.

Our strategy is built around consumers’ four key need areas:

  1. Fixing the basics
  2. Enjoying life
  3. Self Expression
  4. Well-being

LifeCentral program
Asset-by-asset transformation towards portfolio of Full Service Centers with mix of ‘life central’ experiences as base for sustainable growth

Focus on Benelux, and phase out France, proceeds to be invested in transformation

Total investments in LifeCentral:
300-350 million euro

Total targeted divestments:
book value of 1,075 million euro

Wereldhave to adopt a total
property return investment approach

New target LTV of 30-40%,
without an equity / rights issue

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Creating Value

We create value for both our stakeholders and society as a whole – by investing in our centers, by offering returns to our shareholders and by supporting local business and communities.

We create value for both our stakeholders and society as a whole – by investing in our centers, by offering returns to our shareholders and by supporting local business and communities.

Our business model

We convert shopping centers into Full Service Centers in large regional cities in the Netherlands, Belgium and France. We use our insights and local knowledge to ensure these centers are in the right locations to attract tenants and visitors. We also provide additional services to our tenants, including specialty leasing and access to market data. Most of our income comes from rent – tenants pay rent either as a fixed amount or, in some cases, a variable amount, depending on tenants’ revenue. We generate a ‘direct result’ – the profits from our operations – and an ‘indirect result’, reflecting fluctuations in the value of our properties.

Outlook 2020

We are well positioned to transform our assets to Full Service Centers. The assets are on densely populated and well connected locations and the gap between current retail rent levels and mixed-use is modest. Capital allocation will be based on the total property return, with a disciplined data driven, fact based approach. Assets with below target IRRs will be sold. The transformation of our portfolio will be executed simultaneously with our disposal program. This will lower our debt and strengthen our balance sheet, but we expect our earnings per share will decrease over the next three years. We are confident that after the disposals have been executed, we will be able to create rental growth, value growth and dividend growth.

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Change agents

It’s the people working at Wereldhave, bringing their skills, knowledge and enthusiasm every day, that make real change possible. Read their stories to get an insight into how we deploy our strategy in Wereldhave’s day-to-day business.

Make every day successful

Linda Kleij joined Wereldhave straight out of school. In the twenty years since then, she has seen a lot of change. “Customers are more demanding. These days, they can get anything they want online. So why come to a shopping center?”

For Linda – manager of two centers in southern Netherlands – it’s about offering services and ‘experiences’. She notes that young people, for example, are spending more on food & beverage, on socializing with their friends. “We have to work hard to continue bringing people through the doors,” says Linda. “Just offering stores and products isn’t enough anymore. People go to other cities and compare. Things also come in from other countries. Look at Black Friday. It used to be something that happened only in America. Now, it’s one of our busiest days of the year. “We have to keep our centers relevant. To do that, we ask a lot of questions. What do our customers need? What do they miss? What do they expect when they come to the center.”

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Make every day well-balanced

After having worked a few months on the extension plans for the Belle-Île shopping center, Nicolas Beaussillon – Wereldhave Belgium’s Commercial Director – wasn’t convinced. “The plan we had was very traditional. It wasn’t really suited for a market that’s changing so quickly. I was worried that, by the time we built the extension, it would already be out of date.”

Three years later, Belle-Île, just a few miles south-east of Liège, is at the forefront of Wereldhave’s new strategy. It’s one of the first centers that will make the transition from traditional shopping center to shopping 2.0 – a Full Service Center that combines shopping with entertainment, leisure, co-working and food & drink.

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Make every day convenient

Five years ago, when she joined Wereldhave, Ine Beeterens asked for a wild card. “At that time, the focus was really on the investment side. We weren’t focusing enough on the tenants or the customers. We invested, we renovated, we built extensions – but we didn’t attach much importance to what happened after the leases were signed. I said, ‘OK, if I’m going to be responsible for the operations, I need a wildcard. I need to be able to optimise things here’.”

As Wereldhave’s Head of Operations in Belgium, Ine is now putting tenants and customers front and center, expanding services and building local networks across the country’s 9 centers. Her changes are in line with the new LifeCentral strategy – to move away from traditional shopping to centers that offer a mix of retail, leisure, health & beauty, food and entertainment.

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Make every day responsible

Wereldhave’s CSR Manager, Tim van der Weide, has a clear vision: “How we live, work and shop,” he says, “shouldn’t harm us. It should make us better.” For Wereldhave, sustainability, he adds, “is really about a better everyday life”. CSR is a key part of Wereldhave’s LifeCentral strategy. Alongside the new strategy, the Company has launched a CSR program for 2030, aimed at reducing carbon emissions and contributing more to local communities.

“There are three elements to our plan,” says Tim. “It’s about safeguarding the value of our centers. It’s about attracting tenants and visitors, and it’s about being a good neighbor. We also want our centers to be comfortable and safe places to be.” In Europe, buildings account for nearly 40% of carbon emissions – so it’s no surprise that Wereldhave’s plan focuses heavily on climate and the environment.

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