Key highlights
• The reopening of our shopping centres from May 2021 saw a full recovery in retail sales
during the second half of the year, exceeding retail sales during H2 2020 by 23.5% and the
pre-pandemic H2 2019 by 1.4%. The latest retail sales figures available for the month of
February 2022 were 2.7% higher than the pre-pandemic February 2019.
• Solid and consistent tenant demand resulted in a 5.1% rent uplift on 264 renewals and
relettings, of which 100 were new lettings achieving an uplift of 7.2%.
• EPRA vacancy rate at year-end remains at its historically low level and currently stands at
only 1.5%.
• Resilient property values increased by 0.8% over the last six months and slightly decreased
by 0.3% over the last 12 months, supported by broadly stable yields on higher net operating
income (NOI) .
• Rent collection improved during 2021 with 91% of invoiced rent and 96% of due and
collectable rent (allowing for rent concessions) collected. Rent collection for Q1 2022
currently stands at 91%.
• A further €114.4 million of disposals were completed during 2021. In addition, during Q1
2022, we sold Les Grands Hommes, Bordeaux for a price of €22.5 million and 50% ownership
of the office and residential parts of Passage du Havre to AXA - IM Alts, acting on behalf of
clients for a price of €57 million. All these transactions were completed at or close to their
latest valuations. This completes the €200 million disposal programme announced in August
2020.
• Loan to value (LTV) ratio (on the basis of proportional consolidation) reduced further to
40.5% taking into account the abovementioned sales, reaching our target level (31 December
2021 43.8%) and to 38.3% (31 December 2021 40.1%) (adding back purchasers’ costs in the
IFRS consolidated balance sheet).
• IFRS profit up to €104.7 million compared to €50.3 million for the 12 month period in 2020.
• Net earnings (direct investment result) decreased slightly to €110.6 million for the 12 months
to 31 December 2021 compared to €112.0 million for the calendar year 2020. Net earnings per
share, taking into account the 5.6% increase in the number of issued shares as a result of the
scrip dividend in July 2021, were €2.18 compared to €2.27 for the same period in 2020.
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• EPRA Net Tangible Assets of €40.11 per share compared to €40.86 at 30 June 2021. The
decrease is mainly due to the share capital increase resulting from the scrip dividend in July
2021.
• Proposed dividend of €1.50 cash per share and one new share for each 75 shares held. A
new dividend policy is proposed which is a pay-out ratio for the cash dividend ranging
between 65% and 85%, but with a target of 75% of the direct investment result per share and
two dividend payments per annum.
• Eurocommercial maintained its GRESB four star rating, achieving its highest score and also
received an EPRA Gold Award for sustainability reporting for the eighth consecutive year
(sBPR). Full BREEAM certification was achieved on the entire portfolio by the end of
February 2022.
• Company governance simplified by the termination of the depositary receipt structure and
the winding up of STAK.
Board of Management’s commentary
Operationally, our business in 2021 can be divided into two approximately equal halves. During the first
half of the year, the high incidence of COVID-19 continued to affect our shopping centres with
government restrictions resulting in our non-essential stores being closed on average for 56 days, while
restaurants were closed on average for 98 days. Only Sweden escaped closures where our seven
shopping centres remained fully open and trading as they have been throughout the pandemic.
The lifting of government restrictions, mainly during May 2021, saw a swift rebound in retail sales that
gathered pace during the second half of the year when sales exceeded the comparable periods in H2
2020 by 23.5%, and the pre-pandemic H2 2019 by 1.4%. This growth was achieved on around 84% of
previous levels of footfall, demonstrating the high sales conversion rates and the increase in basket sizes
that our retailers regularly comment on.
Against this background, tenant demand for our shopping centres continued to be characterised by
strong letting activity with 264 lease renewals and relettings completed over the year producing an overall
rental uplift of 5.1%. Our vacancies remain at their historically low levels at 1.5%, varying between 1.0%
and 2.5% in our four markets.
The independent valuations at 31 December 2021 showed an increase of 0.8% compared to June 2021
and a slight decrease of 0.3% compared to 31 December 2020, supported by broadly stable yields on
marginally higher NOI. During 2021, we progressed our disposal programme completing the sale of Les
Trois Dauphins, Grenoble in March for €34.4 million. In December, we announced the sale of Chasse
Sud, our hypermarket anchored retail park located south of Lyon at a price of €80 million. The sale
proceeds were partly used to fund the purchase from our joint venture partners, AXA, of their 50% share
in Shopping Etrembières located outside Geneva at a price of €47 million.
On 22 March 2022 we completed the sale of Les Grands Hommes, Bordeaux for a price of €22.5 million.
On 24 March we also completed the sale of our remaining 50% ownership of the office and residential
parts of Passage du Havre together with two smaller adjoining buildings to AXA - IM Alts, acting on behalf
of clients which are our joint venture partners, for a price of €57 million. The Company will remain owner
of 50% of the retail part of the main building of Passage du Havre representing a GLA of around 14,000m²
and will continue to manage this retail asset. These sales complete the Company’s €200 million disposal
programme announced in August 2020. Taking into consideration the sales of Les Grands Hommes,
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Bordeaux and parts of Passage du Havre for in total €79.5 million, the LTV ratio (on a proportional
consolidated basis) reduces further to 40.5%, reaching our target level.
Rent collection improved during 2021 and currently stands at 91% of invoiced rent and 96% of due and
collectable rent, i.e. allowing for deferrals or COVID-19 rent relief provided and booked. These 2021
collection rates improved steadily during the year and are expected to improve further, particularly once
the provisions of the delayed French government support package covering Q2 can be implemented.
We reported in August 2021 that the COVID-19 granted rent discounts were expected to be €14 million
for the entire portfolio for 2021. This is now adjusted to €13.1 million and the largest part of this amount
is already expensed in the 2021 financial year. Only €7.0 million has to be straight-lined over the period
2022 to 2027. Under the current circumstances and given the outlook for 2022, we do not expect to grant
any rent concessions in 2022.
Towards the end of 2021 we saw another increase in the number of COVID-19 cases following the
emergence of the Omicron variant which again threatened to impact upon our business. However,
supported by advanced vaccination programmes and the rapid roll-out of the third dose, government
authorities were able to limit any additional restrictions to a broader application of the relevant country
health pass, with some additional limitations on visitor numbers. These restrictions came too late to
impact the important Christmas trade, although they have suppressed footfall during the first months of
2022. However, it has been encouraging to see that all our shopping centres have been able to remain
fully open and, despite rising inflation and energy prices, retail sales have continued to hold up well as
any remaining restrictions are lifted.
Against this generally positive background and with full occupancy at affordable rental levels (our low
occupancy cost ratio’s (OCRs) remain at around their pre-COVID levels), we expect normal trading
patterns in our shopping centres to be maintained, providing a solid base for stable income with future
rental growth encouraged by healthy levels of tenant demand and rental indexation currently averaging
3.6% across the portfolio. Although today the Company’s operations are not directly impacted by the war
in Ukraine, consumer confidence and spending in our markets could be affected, particularly if the
situation persists or escalates at a time of rising living costs and inflation.
The results of the Company for the financial year 2021 allow us to propose to increase the cash dividend
from €0.50 paid in 2021 to €1.50 to be paid on 1 July 2022. There will also be a small mandatory scrip
dividend of 1 new share for every 75 existing shares to comply with the dividend distribution obligation
resulting from the Company’s tax status. We are also pleased to propose a new dividend policy which is
a pay-out ratio for the cash dividend ranging between 65% and 85%, but with a target of 75% of the direct
investment result per share and payment of two dividends per annum.
Operational and financial review
Retail sales
Following the general reopening of our shopping centres from May 2021, there was a quick and full
recovery in retail sales which increased by 23.5% during H2 2021 compared to H2 2020. However, even
more encouraging was that during H2 2021 retail sales were higher than pre-pandemic levels, being
1.4% above H2 2019. Fashion sales have almost recovered to previous levels, while several sectors
have moved ahead of their pre-COVID levels including groceries, home goods, gifts and jewellery,
telecom and electrical, health and beauty and sport. The expanding value retail sector has also
flourished, bringing an added dimension to our tenant mix. The strongest recovery and growth in both
retail sales and footfall has been in Sweden where our seven shopping centres have remained open
throughout the pandemic, albeit with some restrictions at times on visitor numbers in individual stores
and specific distancing measures applied in restaurants and cafés.
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Like-for-like retail sales by country*
H2 2021/H2 2019 H2 2021/H2 2020
Overall 1.4% 23.5%
Belgium -5.8% 28.1%
France 0.6% 10.8%
Italy 0.0% 39.1%
Sweden 5.7% 14.3%
* Excluding extensions/redevelopments.
Like-for-like retail sales by sector*
H2 2021/H2 2019 H2 2021/H2 2020
Hypermarkets/Supermarkets 8.7% 2.4%
Fashion -3.5% 31.5%
Shoes -7.8% 35.3%
Health & Beauty 1.4% 15.3%
Gifts & Jewellery 6.8% 28.6%
Sport 13.1% 32.4%
Home Goods 13.5% 15.1%
Telecom & Electrical 1.2% 21.4%
Books & Toys -8.4% 13.8%
F&B (Restaurants & Bars) -3.7% 43.0%
Services -9.5% 24.2%
*Excluding extensions/redevelopments.

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