Unibail Rodamco Westfield : URW NV - 2023 ANNUAL REPORT

Table of Content

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The Management Board ("MB") of Unibail-Rodamco-Westfield N.V. ("URW NV" or "the Company") hereby presents its management report and the consolidated and company only financial statements of URW NV for the period ending December 31, 2023.

1.1 GENERAL INFORMATION

URW NV is a public limited liability company under the laws of the Netherlands. The Company was incorporated as Unibail-Rodamco B.V., a private company with limited liability on February 14, 2018 and converted its legal form to a public limited liability company on March 22, 2018. On the same date, the Company changed its name to WFD Unibail-Rodamco N.V. At the Annual General Meeting held on June 9, 2020, the shareholders adopted the name change to Unibail-Rodamco-Westfield N.V.

On June 7, 2018, Unibail-Rodamco SE (now known as Unibail-Rodamco-Westfield SE, or "URW SE") announced it had completed the acquisition of Westfield Corporation ("Westfield"), to create Unibail-Rodamco-Westfield ("URW Group"), the stapled group which, collectively, consists of URW SE, URW NV and their respective controlled undertakings whose financial information is included in their respective conso lidated financial reporting, the premier global developer and operator of flagship destinations. The URW Group combines two of the strongest and most respected names in the real estate industry to build on their legacies. The acquisition of Westfield was a natural extension of URW SE's strategy of concentration, differentiation, and innovation. Upon completion of the Westfield Transaction, URW SE and former Westfield securityholders held stapled shares, each comprising one ordinary share in the capital of URW SE and one class A share in the capital of URW NV ("Stapled Shares" - see 5.2.2 "authorised share capital - form of shares"). The URW Group has obtained the approval of the Euronext Listing Board on February 28, 2023 to change its market of reference from Euronext Amsterdam to Euronext Paris and delist the URW stapled shares from Euronext Amsterdam. Therefore as at December 31, 2023 the Stapled Shares are listed on Euronext Paris. URW Group has also established a secondary listing on the Australian Securities Exchange to allow former Westfield securityholders to trade Stapled Shares locally in the form of CHESS Depositary Interests ("CDIs").

The main business objectives of the Company and its subsidiaries (together referred to as "the Group" or "URW NV") are to invest in assets, primarily through the direct or indirect acquisition of real estate and to enter into cash pooling arrangements with, to provide financing to, and to furnish guarantees for the benefit of the URW Group and other affiliated bodies of the Company.

1.2 BUSINESS REVIEW AND 2023 RESULTS

This section provides an overview of the most significant business events for URW NV in 2023. The Company's accounts reflect the financial results for the period from January 1, 2023, until December 31, 2023. All references to operational results, such as tenant sales, rents and leases signed, relate to the 12-month period ended December 31, 2023, unless indicated otherwise.

Certain amounts in the business review are recorded in USD to eliminate currency impact in comparisons with the previous year. These amounts in case of leasing activity and Commercial Partnerships also reflect data for the full centre and do not consider the URW NV ownership percentage in case of Joint Ventures.

1.2.1 ACCOUNTING PRINCIPLES

The Group's consolidated financial statements as at December 31, 2023, were prepared in accordance with International Financial Reporting Standards ("IFRS") as applicable in the European Union as at such date.

The Group also prepares financial information for internal management purposes in a proportionate format, in which the joint-controlled entities are accounted for on a proportionate basis, instead of being accounted for using the equity method under IFRS. The business review and results are presented based on the financial information on a proportionate basis unless otherwise indicated, with no impact on the net results. The proportionate part of the underlying amount is based on the percentage of ownership in the respective companies jointly controlled, associates are accounted for at the equity value.

Certain amounts recorded in the consolidated financial statements reflect estimates and assumptions made by management in t he current uncertain context regarding inflation, interest rates and energy cost resulting from geopolitical and economic environment and difficulties in assessing their impacts and future prospects. In this context, management has taken into account these uncertainties on the basis of reliable information available at the date of the preparation of the consolidated financial statements, particularly with regards to the fair value of investment properties and financial instruments, the estimation of the provision for doubtful debtors, as well as the testing of goodwill and intangible assets.

Due to inherent uncertainties associated with estimates, the Group reviews those estimates based on regularly updated information. Actual results might eventually differ from estimates made at the date of the preparation of the consolidated financial statements.

98% of URW NV's property portfolio related to the Shopping Centres and Offices and intangible assets were valued by independent appraisers as at December 31, 2023.

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1.2.2 SCOPE OF CONSOLIDATION1

The organisation chart as at December 31, 2023, is as follows:

The principal changes in the scope of consolidation since December 31, 2022, are:

• The disposal of Westfield North County in February 2023;
• The disposal of Westfield Brandon in May 2023;
• The disposal of Westfield Mission Valley in July 2023;
• The disposal of Westfield Valencia Town Center in September 2023;
• The foreclosure of San Francisco Centre and Emporium (offices included) in October 2023.

1.2.3 OPERATIONAL REPORTING

URW NV operates in 2 regions, the US and the Netherlands and in 2 segments, retail and offices. Since activities in the Netherlands are minor compared to the US, they are reported under "other region".

1.2.4 OPERATING PERFORMANCE

Over the period, the economic situation continued to be impacted by high inflation and further increase in interest rates by Central Banks but a resilient employment market. In this context, URW NV's assets showed strong activity which goes beyond the post-COVID recovery. Sales and footfall data in the US relate to Flagship assets as these are the core of URW NV's activities in the US and as Regional assets are being streamlined.

The Group uses 2019 in some cases as a comparable year to 2023, URW NV is of the opinion that this is the last full year of business without many disruptions.

FOOTFALL2 AND TENANT SALES3

In the US, 2023 footfall4 increased compared to 2022, up +3.1%, exceeding 2019 levels.

US TENANT SALES

In the US, 2023 tenant sales5 increased by +3.0%, or +4.8% excluding Luxury. Overall, 2023 sales came to +19.2% above 2019 levels 6.

This performance compares with an average core inflation of 4.8% in 2023 and national sales index of +4.0%7.

The performances in 2023 were driven by the experiential sectors with +26.7%7 for Entertainment, +13.5% for F&B, +13.4% for Fitness and +8.9% for Health & Beauty, while Fashion was stable (+0.2%), but +16.8% above 2019. Luxury saw a -6.5% decline but remained significantly (+62.3%) above 2019 levels.

1. The total scope of consolidation consist of more than 300 entities.
2. In the US excluding the centres for which no comparable data of the previous year is available. In addition, footfall has been restated from the disposals which occurred during the semester.
3. Tenant sales for all US centres in operation, including extensions of existing assets, but excluding deliveries of new brownfield projects, newly acquired assets and assets under heavy refurbishment, and excludes Auto and Department Stores in US. In addition, sales have been restated from the disposals which occurred during the semester.
4. US Flagships only. US Regionals at -0.9%.
5. US Flagships only. US Regionals and US CBD asset (Westfield World Trade Center) at +3.0%.
6. US Flagships only. US Regionals and US CBD asset at +4.1%.
7. On a same scope. +90.2% including new openings.

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The table below summarises the Group's tenant sales growth during 2023:

BANKRUPTCIES

The Group's tenant insolvency procedures have affected 72 out of 2,768 stores in FY-2023 (vs. 37 out of 3,506 stores in FY-2022). The total leasing revenues (including service charges of URW NV) which remain exposed to tenants currently in some form of bankruptcy procedure amount to €8.3 Mn over c. 18,118 sqm of retail space.

RENT COLLECTION8

As at February 16, 2024, 98% of invoiced 2023 rents and service charges9 in the US were collected.

Overall rent collection by quarter in 2023 is shown below10:

As at December 31, 2023, the expected loss allowance in the Consolidated statement of financial position amounted to €47.1 Mn compared to €57.1 Mn at the end of December 31, 2022. The expected credit loss for debtors recorded in the Consolidated statement of comprehensive income amounted to a reversal of €4.0 Mn for the period ending December 31, 2023, compared to an expected credit loss of €11.5 Mn for the year ended December 31, 2022.

1.2.5 LEASING ACTIVITY

In 2023, 758 leases were signed on standing assets, representing 2,582,895 sq. ft. and $175.7 Mn of MGR up compared to $137.3 Mn of MGR signed in 202211 (up +28%) on 671 leases (up +13%), representing 2,319,670 sq. ft. (up +11%), illustrating the strong dynamic of the activity. As market conditions improved, the number of long-term deals signed also increased from 343 to 489 (up +43%), representing 65% of 2023 deals, compared to 51% in 2022. MGR signed on leases above 3 years increased by +47% and amounted to 72% vs. 63% in 2022.

The overall uplift on relettings and renewals was +16.8% for the US Shopping Centres (+8.1%) and +20.6% for Flagships12. In 2023, the Group focused on long-term lettings and relettings, while relying on short-term deals in a more selective and limited way mainly on renewals. Deals longer than 36 months had an MGR uplift of +32.7%, including +36.2% for the US Flagships, while for leases between 12 and 36 months, MGR uplifts were slightly negative (-3.4% compared to -19.8% in 2022). The strong uplift signed on long-term deals compensated for the downlift on short-term deals signed during the Covid-19 pandemic. This allowed the Group to increase the revenues secured through MGR and reduce the portion of SBR attached to the short-term leases previously in place.

In total, the Shopping Centres SBR increased from $20.5 Mn in 2019 (3.1% of NRI) to $81.4 Mn in 2022 (13.8% of NRI) and amounted to $54.0 Mn in 2023 (10.3% of NRI). The decrease of -$27.4 Mn in 2023 compared to last year and -$16.6 Mn on a like-for-like basis, is mainly due to high SBR settlement in 2022 based on 2021 sales and conversion of SBR to MGR.

The tenant mix continued to evolve with the introduction of new retailers (Gorjana at Westfield Old Orchard, Westfield UTC and Westfield Valley Fair, Swatch at Westfield UTC, Faherty at Westfield UTC, The North Face and Jo Malone London at Westfield Galleria at Roseville) and DNVBs (Vuori at Westfield Century City, Rothy's at Westfield Galleria at Roseville and Alo at Westfield Topanga).

The Luxury sector has also seen strong progress with a number of important openings such as Celine and Dior at Westfield Topanga, Chanel Beauty at Westfield Century City, Chloé, Valentino and Fendi at Westfield Valley Fair as well as Saint Laurent Paris at Westfield UTC and Westfield Valley Fair.

1.2.6 RETAIL MEDIA & OTHER INCOME

Retail Media & other income revenue in 2023 amounted to $62.4 Mn, a decrease of -$1.2 Mn (-1.9%) compared to 2022, impacted by disposals. On a like-for-like basis, it increased by +$6.2 Mn, i.e. +12.2%.

Retail Media continued to perform strongly. In 2023, several product launches were organised by prime brands in the automotive and luxury sectors, including BMW and Jaeger LeCoultre at Westfield Century City.

URW also launched creative campaigns with Disney, Emirates, Dior, Cartier, Chanel, Lucid and L'Oréal.

1. MGR + CAM in the US, excluding 2023 settlement.
2. MGR + CAM in the US.
3. Based on cash collection as at February 16, 2024 and assets at 100%.
4. Restated for disposed assets.
5. Excluding CBD centres.

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1.2.7 NET RENTAL INCOME AND VACANCY

The total net change in NRI for URW NV amounted to -$63.4 Mn and breaks down as follows:

• -$63.4Mn related to shopping centres impacted by disposals partly offset by an increase in Flagships NRI;
• -$0.9Mn related to offices and residential.

US shopping centre NRI has been impacted by 2022 and 2023 disposals and foreclosure for -$74.7 Mn (Westfield Santa Anita, The Village at Topanga, Westfield Trumbull, Westfield South Shore, Westfield North County, Westfield Brandon, Westfield Mission Valley, Westfield Valencia Town Center and San Francisco Centre and Emporium (offices included)).

Overall, US like-for-like shopping centre NRI increased by +$8.7 Mn i.e. +1.9% mainly driven by Flagship assets. Like-for-like NRI growth for Flagship assets was +$22.2 Mn i.e. +6.2% driven by net leasing revenue13 of +5.9%, increase in variable income and recovered property taxes14, partly offset by lower SBR and negative impact of doubtful debtors (release in 2022 of moratorium provision booked in 2021). Like-for-like NRI performance for Regionals was -12.3% and -5.2% for CBD assets.

As at December 31, 2023, the EPRA vacancy was 8.4% ($86.9 Mn), down by -190 bps from December 31, 2022. The decrease in vacancy was driven by the proactive leasing approach of the Group and change in scope15. The vacancy decreased by -90 bps to 7.3% in the Flagships, below its pre- Covid level of 2019 (7.7%). It decreased by -160 bps to 10.1% in the Regionals, along with the vacancy of the CBD assets that decreased by -290 bps to 20.1%.

Occupancy on a GLA16 basis was 93.5% as at December 31, 2023.

The OCR on a rolling 12-month basis stood at 10.7% as at December 31, 2023, compared to 10.5%17 as at December 31, 2022 and 11.8% as at December 31, 2019, reflecting a combination of rental uplifts and strong sales performance. OCR for Flagships stood at 11.4% as at December 31, 2023, below 2019 level of 11.7%.

1. Net MGR and CAM.
2. Based on Capex spent.
3. Disposals/foreclosures in the US.
4. GLA occupancy taking into account all areas, consistent with financial vacancy.
5. Based on all stores operating for more than 12 months (excluding atypical activities) and not only Specialty stores.

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1.3 FINANCIAL REVIEW 2023 RESULTS

The Group's consolidated financial statements (based on IFRS basis) reflect the activities of URW America Inc, URW WEA LLC ("WEA") and WFD Unibail-Rodamco Real Estate B.V. The table below shows the result of the Group in recurring and non-recurring activities. This definition is utilised by URW NV's management to distinguish between operational (recurring) and other (non-recurring, including fair value valuations of Investment Properties and loans) activities and does not intend to reflect IFRS nor EPRA definitions:

• Non-recurringactivities include valuation movements, disposals, mark-to-market and termination costs of financial instruments, bond tender premiums, impairment of goodwill or recognition of negative goodwill as well as costs directly incurred during a business combination and other non-recurring items.

FINANCIAL RESULTS18

URW NV reported negative net operating results of -€234.1 Mn (2022: -€407.4 Mn) for the period ended December 31, 2023. The recurring net

operating result decreased to €419.8 Mn (2022: €481.2 Mn) mainly due to the disposal of properties in the US in 2023 (Westfield North County, Westfield Brandon; Westfield Mission Valley Shopping Centres, Westfield Valencia Town Center and San Francisco Centre and Emporium (offices included)). The negative net operating result of the non-recurring activities for the period ending December 31, 2023, decreased from -€888.6 Mn to -€653.9 Mn, mainly due to the decrease of -€213.7 Mn in the negative valuation movement on assets compared to December 31, 2022.

The net result for the year ended December 31, 2023 is -€692.4 Mn (2022: -€233.7 Mn) of which -€609.6 Mn (2022: -€152.2 Mn) attributable to

the shareholders of URW NV with a net result per share (owners of URW NV shares) for the period of -€2.63 (2022: -€0.66).

Non-recurring financing result decreased by -€569.0 Mn to -€45.2 Mn (2022: €523.8 Mn). The decrease is predominantly caused by the unwinding

of Macro Swaps, this resulted in a decrease of -€450.6 Mn to €14.7 Mn (2022: €465.3 Mn) in the fair value of derivatives. Non-recurring financing result is further affected by a decrease in fair value adjustment of preference shares from €64.2 Mn in 2022 to €9.8 Mn for the period ended December 31, 2023, as well as an impairment on Rouse of -€61.7 Mn (2022: -€7.5 Mn) for the year ended December 31, 2023.

The recurring net result for the period decreased with -€149.5 Mn from €118.2 Mn as at December 31, 2022, to -€31.3 Mn for the period ended December 31, 2023. The decrease in the net recurring result for the period ended December 31, 2022 can mainly be attributed to the increase in the interest rate in 2023, this resulted in an further decrease of -€86.4 Mn in financing result from -€361.9 Mn in 2022 to -€448.3 Mn for the year ended December 31, 2023. The contribution of companies accounted for using the equity method decrease with -€41.4 Mn to €216.8 Mn (2022: €258.2 Mn) for the year ended December 31, 2023, this is mainly due to the disposals that took place in 2023.

18 The figures are presented on IFRS basis.

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LIQUIDITY POSITION

URW NV has cross guarantees with URW SE and the liquidity needs are covered by the available undrawn credit lines at URW Group level. As at December 31, 2023, the URW Group had €13.6 Bn of cash on hand and undrawn credit lines (€13.7 Bn on a proportionate basis) including €5.5 Bn of cash on hand (€5.6 Bn on a proportionate basis).

1.3.1 INVESTMENT AND DIVESTMENT

Unless otherwise indicated, the data presented in investment and divestment are on a proportionate basis as at December 31, 2 023, and comparisons are with values as at December 31, 2022.

INVESTMENTS

In 2023, URW NV invested €166.2 Mn in capital expenditures in investment properties, compared to €110.3 Mn in 2022. The total investment breaks down as follows:

DISPOSALS

Disposal of Westfield North County

On February 1, 2023, the Group completed the sale of the Westfield North County ground lease located in Escondido, California, to Bridge Group Investments and Steerpoint Capital, transferring ownership and management of the asset. The sale price of $57 Mn (at 100%, URW share 55%) for the asset, which has 30 years left on its ground lease, reflects the property's book value as at December 31, 2022.

Disposal of Westfield Brandon

On May 25, 2023, URW disposed Westfield Brandon Shopping Centre in the US. The sale price of $220 Mn (URW share 100%) reflects a 10.0% net initial yield and a 4.4% discount to the latest unaffected appraisal.

Disposal of Westfield Mission Valley

On July 21, 2023, the Group completed the sale of Westfield Mission Valley Shopping Centres in San Diego, California, for a total amount of $290 Mn (at 100%, URW share 42%), including the sale of Westfield Mission Valley "East" to Lowe Enterprises and Real Capital Solut ions, and Westfield Mission Valley "West" to Sunbelt Investment Holdings Inc. The transaction value reflects a combined initial yield of 8.5% on the in-place net operating income ("NOI") and a 12% discount to the last unaffected appraisal.

Disposal of Westfield Valencia

On September 4, 2023, the Group completed the sale of Westfield Valencia Town Center, in Santa Clarita, California, to Centennial Real Estate at a total value of $199 Mn (at 100%, URW share 50%), above the $195 Mn debt amount (at 100%, URW share 50%) on the asset. The transaction value reflects less than 3% discount to its last unaffected appraisal.

Foreclosure of San Francisco Centre and Emporium

On October 26, 2023, San Francisco Centre and Emporium (office included) was put on foreclosure. The Group lost control of the asset (asset value of $301 Mn as at June 30, 2023) and the companies holding it were thus deconsolidated together with the debt allocated to it ($340 Mn).

Investment property classified as held for sale

In H2-2023, URW signed a Sale, Purchase and Escrow Agreement with a $30 Mn non-refundable cash deposit for the disposal of Westfield Oakridge. The transaction is expected to be completed in Q2-2024.

1.3.2 PROJECTS

URW NV did not have any share in URW Group's projects pipeline for the year ended December 31, 2023.

1.3.3 PROPERTY PORTFOLIO AND NET ASSET VALUE AS AT DECEMBER 31, 2023

Unless otherwise indicated, the data presented in the property portfolio are on a proportionate 19 basis and as at December 31, 2023, and comparisons are with values as at December 31, 2022.

PROPERTY PORTFOLIO

Investment market retail

US retail investment volumes saw a -38%year-on-year decrease in 2023, with total transactions reported by Real Capital Analytics of $57.3 Bn. For shopping centres, the decrease in deal volume year-on-year was -51% at $30.5 Bn.

Shopping Centre portfolio

The value of URW NV's Shopping Centre portfolio is the addition of the value of each individual asset as determined by the Group's appraisers and the value of the Westfield trademark. In the information all respective assets are included, including investment property under construction.

98% of the value of URW NV's portfolio was appraised by independent appraisers as at December 31, 2023.

19 The sum of the Gross Market Value ("GMV") for the assets fully consolidated, the ownership at share of the GMV of assets jointly controlled accounted for using the equity method and the equity values for assets not controlled by URW NV.

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The following table shows the breakdown for the US Shopping Centre portfolio:

Figures may not add up due to rounding.

1. The sum of the Gross Marked Value ("GMV") for the assets fully consolidated, the ownership at share of the GMV of assets jointly controlled accounted for using the equity method and the equity values for assets not controlled by URW. Valuation excluding estimated transfer taxes represents the GMV minus transfer taxes and transaction costs which are estimated after taking into account the likely disposal scenario: sale of the asset or of the company that owns it.
2. Annualised contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses, divided by the asset value net of estimated transfer taxes and transaction costs. Shopping centres under development or not controlled by URW and the Westfield trademark are not included in the calculation of NIY.
3. Annualised contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses + the ERV of vacant space, divided by the asset value net of estimated transfer taxes and transaction costs. Shopping centres under development or not controlled by URW, and the Westfield trademark are not included in the calculation of Potential Yield.
4. The Westfield trademark is included in the valuation of the US Flagships.

ADDITIONAL VALUATION PARAMETERS - IFRS 13

URW NV complies with the IFRS 13 fair value measurement and the position paper 20 on IFRS 13 established by EPRA, the representative body of the publicly listed real estate industry in Europe. Considering the limited public data available, the complexity of real estate asset valuations, as well as the fact that appraisers use in their valuations the non-public rent rolls of the Group's assets, URW NV believes it is appropriate to classify its assets under Level 3. In addition, unobservable inputs, including appraisers' assumptions on growth rates and Exit Capitalisation Rate ("ECR"), are used by appraisers to determine the fair value of URW NV's assets. In addition to the disclosures provided above, the following tables provide a number of quantitative data in order to assess the fair valuation of the Group's assets.

SHOPPING CENTRES

The below overviews including most significant input and output parameters of the external valuations of the investment properties and the sensitivity overviews of the fair value of investment property are presented based on a proportional basis for the fully consolidated investment property as well as the investment property included in the joint ventures accounted using the equity method. The total value of investment property represents €9,015.6 Mn, this consist of the total €4,217.4 Mn presented investment property in the consolidated position excluding investment property under contraction carried at cost and €4,798.2 Mn of the proportioned share of the investment property presented in the joint venture and equity value for the associate overview in note 7.2.

The shopping centres are valued using the discounted cash-flow and/or yield methodologies using Compound Annual Growth rates ("CAGR") as determined by the appraisers.

NIY, DR and ECR weighted by GMV. Vacant assets, assets considered at bid value and assets under restructuring are not included in Min and Max calculation. Assets under development or not controlled by URW NV and the Westfield trademark are not included in this table.

1. Average annual rent (MGR + SBR) per asset per sqm.
2. Rate used to calculate the net present value of future cash-flows.
3. Rate used to capitalise the exit rent to determine the exit value of an asset.
4. Compound Annual Growth Rate (CAGR) of NRI determined by the appraiser (10 years).

For the US, the split between Flagships and Regionals is as follows:

NIY, DR and ECR weighted by GMV. Vacant assets, assets considered at bid value and assets under restructuring are not included in Min and Max calculation. Assets under development or not controlled by URW NV and the Westfield trademark and are not included in this table.

1. Average annual rent (MGR + SBR) per asset per sqm.
2. Rate used to calculate the net present value of future cash-flows.
3. Rate used to capitalise the exit rent to determine the exit value of an asset.
4. Compound Annual Growth Rate (CAGR) of NRI determined by the appraiser (10 years).

20 EPRA Position Paper on IFRS 13 - Fair value measurement and illustrative disclosures, February 2013.

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