Unibail-Rodamco group consolidated earnings reached a net recurring profit of €426 million on net rental income of €634 million, against €395 million and €601 million respectively for the first half of '08. The group's net asset value per share fell 12.9% to €131.70, just below the €133 recent share price.

CEO Guillaume Poitrinal said the slower business was in line with expectations, but he noted some pickup activity in June. "This happens in difficult times where most macro economic indicators are negative," he said in a statement. "Tenant sales in the retail sector came down, although June sales show positive growth. As expected, the group has seen a slowdown of net rental income growth across its portfolio. Yet, income growth remains positive on the back of high quality assets, which are actively marketed to the public. The group's shopping centres remain in high demand by retailers looking for customer traffic and exceptional locations."

Retail benefited from the strong position of its shopping centres, with a low vacancy rate of 2.0% at the end of first half '09 vs 1.8% end-2008. The office sector, following divestments in 2008, saw a decrease in rental income but a like-for-like income rise of 10.1%, of which 7.3% from indexation. Vacancies in the office sector dropped to 4.7% after the successful letting of 20,500 square meters to French railways SNCF in mid-July.

In the half, UR signed €1.2 billion of new debt year-to-date, including €575 million from the net share settled convertible bond issued in April. The undrawn credit lines increased to €2.4 billion at June 2009, and average cost of debt in the first half was 3.8%. The loan-to-value ratio increased slightly to 33% at mid-year 2009 from 30% at end-2008, mostly driven by declining asset values. The group wrote off €1.93 billion in gross market value in the period, bringing the total asset write-down over the last 12 months to €3.7 billion or 16%.

UR said if the outlook remains unchanged from earlier prognoses this year; it will continue to invest in its development pipeline, having raised its return criteria to reflect the current market situation. It remains alert to opportunities that may be triggered by the current economic climate, and reiterates its full year recurring EPS growth outlook of 7% or more.

"The group confirms its policy of distributing 85% to 95% of recurring earnings. For 2009, this distribution is scheduled to be fully paid in April 2010."