Ann: URW Financial information as at September 30, 2021, page-14

agree the risk/reward looks good, but not convinced it won’t drop another 10% in Europe… the price trend is negative and they’re still providing rent relief this 2h 2021 half. Guidance for 3.50+ eps in 2h compared to 3.24 eps achieved during a terrible lockdown impacted 1h 2021 doesn’t inspire a lot of confidence, although perhaps they’re being conservative with the guidance, especially as the US which is 24% of the asset base is doing LfL tenant sales greater than 2019. There’s only 9 weeks left in the year so they’d have a pretty good handle on earnings.

by comparison, Klepierre had 0.73 cash eps in 1h and is guiding to 1.30 for 2h, a big improvement, yet just have Europe, no US.

Tourism is negligible and there are still masks and health passes needed in some countries, so it can recover, but suspect they want to see how Xmas trading goes, as do their tenants.

All that said, it’s trading on 11% 2021 EPS yield… which includes almost 15% of the rent roll foregone in rent relief. Klepierre trades on 10% EPS yield.

Yet SCG trades on 6% EPS yield, and Simon Property on 7.4% EPS/FFO yield.

Are European premium centres’ growth prospects that much worse than Australian and US centres. Suspect not.. yet the market is yet to arbitrate away the difference, although interestingly in June 2021, there was no difference. A 30-40% valuation gap has opened 4 months… even after adjusting for 2021 EPS/ the difference in CoVID re-opening speed. This seems quite extraordinary.