Good morning, and welcome to Unibail-Rodamco-Westfield's 2023 Full Year Results Presentation. In 2023, we delivered strong operational performance across all activities. This performance was driven by dynamic leasing activity and indexation in Continental Europe at 6.5%, which has contributed to an adjusted recurring earnings per share of EUR 9.62 above our full year guidance. During the year, we made further deleveraging progress in a challenging investment market, securing 11 transactions worth EUR 1 billion. Disposals since 2021 have contributed EUR 5.1 billion to the IFRS net debt reduction, with net debt now below EUR 20 billion for the first time since 2018. In 2023, we also strengthened our balance sheet by successfully executing a first-of-its-kind exchange of our hybrid bond. This maintained our credit rating and our continued access to the bond market.
Access that was confirmed in December, when we successfully issued another subscribed EUR 750 million green bond. These transactions show continued debt investor confidence and our ability to execute well-managed strategic activity in the market. The improved visibility of our operating performance, the delivery of major development projects in 2024, and our strong liquidity position give us the confidence to reinstate shareholder distributions. We will propose a cash payment of EUR 2.50 per share for approval at our AGM in April. Let's go deeper into the group's robust financial performance. With a 6.7% increase versus 2022, our like-for-like group EBITDA is now back to 2019 levels, ahead of the target set at our 2022 Investor Day.
Our adjusted recurring earnings per share is up 3.3% year-on-year, and in 2023, our deleveraging progress has delivered a pro forma reduction in IFRS net debt of almost EUR 1 billion. This net debt reduction, combined with our strong EBITDA, drives our net debt to EBITDA ratio down to 9.3x, a significant improvement from 9.9x in 2019. These results are primarily enabled by our strong shopping center performance. Tenant sales grew by 6.4% in 2023, ahead of core inflation, supported by footfall growth, which is up almost 5%. This footfall has been mainly driven by the positive evolution of our retail mix and decreasing vacancies since the peak of COVID.
We are confident that we'll continue this trend based on our 2023 leasing activity, which improved vacancy by 110 basis points back to 2019 levels. Through proactive management, we have signed a higher volume of long-term deals and secured more MGR. Long-term leases represent 78% of the MGR signed last year, up 5 points from 2022, and overall, the group's MGR uplift on all leasing activity was 6.8% on top of indexation. Let's look at footfall and sales more closely. Starting with the U.S. on the right of the slide, we see a positive performance in terms of footfall and sales, both up 3% on the strong 2022 base.
Excluding luxury, which accounts for 14% of our portfolio sales, but represents less than 1% in the overall U.S. retail goods market, sales are up 4.8% versus last year. In the context of growing sales, the decrease in sales-based rent, seen here, is mainly linked to the successful conversion into higher MGR as part of our leasing activity. Following the positive evolution of footfall, other variable income in the U.S. has continued to grow, with retail media revenues up 12% in 2024... 2023, sorry, on a like-for-like basis. In Europe, where Q1, 2022 was still impacted by some COVID restrictions, footfall is up 5.2% and tenant sales up 7.5%. When compared to blending national sales indices for the European markets in which we operate, our performance suggests we are gaining market share.
Sales-based rents are up on the back of these increasing sales. As with the U.S., to mitigate the impact of COVID, we signed more short-term deals with a higher variable component in Europe. As we have already done in the U.S., we will convert this SBR into MGR as these leases expire. Finally, other variable income is up, primarily driven by new revenues in retail media, which I will come back to later in the presentation. Our tenant sales also gives us a clear view on consumer behavior. The performance of experience-led sectors such as entertainment, fitness, and food and beverage show we are meeting demand with the right retail mix of our assets. Given the discretionary nature of these categories, the highest performance demonstrates the quality of our catchment areas and the spending power of our customers, even in a high inflation environment.
This quality is also visible in the positive evolution of fashion sales, which, despite sector challenges, are up 5% at URW's assets versus 2022. This performance is a result of store consolidation strategies, which favors URW asset and is another indicator that suggests we are gaining market share. Health and beauty is performing very well, up 15% on 2022. This is a globally growing sector that we are focused on, which also shows the same concentration strategy on larger stores in the best locations. A great example is Rituals, who won Retail Concept of the Year at the MAPIC Awards in November. In 2023, we signed 9 deals with them, including upsizing 7 existing locations and opening 2 new stores.
Overall, since 2019, we have seen a 74% increase in Rituals' total GLA with us, and the brand has more than doubled its average store size over the same period. Our 2023 leasing performance illustrates perfectly this trend of retailers focusing on the best locations. Looking a little bit more deeply, you can see here how we protected demand for our assets through a proactive leasing strategy, immediately mitigating the impact of COVID on vacancy. The consistently high leasing volumes we delivered from 2021 onwards are a testament to our active management and the attractivity of URW centers. We rebuilt commercial tension through short-term deals at the peak of our vacancy, and then increased the proportion of long-term deals at progressively higher MGR level.
That focus has now returned vacancy to 2019 levels at 5.4%, while MGR, sorry, per square meter is signed, is almost back to 2019 levels as well. We are confident we'll continue to increase MGR per square meter as we sign more long-term deals and convert SBR into MGR going forward, leveraging the appeal of our assets for retailers in their broader drive-to-stores strategy. Through our long-term strategy, along with our deep understanding of our customers and markets, we have created a portfolio of unparalleled quality. To do this, we have made bold management decisions and embarked on ambitious transformation projects with a constant attention to optimizing our retail mix. Our retenanting of two department store units in Spain is a great example of this.
In 2021, at the height of the COVID pandemic, we seized the opportunity to negotiate the early departure of the underperforming El Corte Inglés department stores in Westfield Parquesur and La Vaguada . This decisive move allowed us to secure substantive termination income and then transform over 50,000 square meters of outdated retail space into a vibrant, diverse mix of leading brands. The project is now pre-let at 93%, with a 16% uplift in MGR. That bold long-term vision has also led us to make major progress in driving new revenues in retail media. Our in-house agency, Westfield Rise, is delivering growth while creating a dynamic experience for customers. In 2023, we delivered a 17% increase in net margin in Europe versus 2022, for a total of EUR 53 million and a 10% increase of our average revenue per visits.
Retail media offers brands the unique proposition of immediate interaction with a physical audience close to a retail store or point of purchase. That capability is attracting major brands to use our centers to engage directly with customers. In addition to digital media advertising, where we have an unparalleled in-mall media network, Westfield Rise also executed around 1,300 physical activations for brands in 2023, up 12% on last year. These activations, from product sampling to in-person events with influencers and celebrities, enhance our offer and add to our customer experience. Our approach is driving results, and Westfield Rise has already secured 42% of our budgeted 2024 revenue. This gives us confidence we'll achieve the EUR 75 million net margin target. A key part of our retail media strategy is turning our significant footfall into qualified data, which provides audience segmentation that is highly valued by advertisers.
To do this, we have collaborated with audience and footfall measurement startup, Digeiz, on an AI-powered algorithm that converts CCTV footage into fully anonymized and GDPR-compliant data. Thanks to this powerful technology, our specialist teams are able to extract valuable audience segmentation and targeting criteria. This will increase revenue per visit, unlock access to a higher proportion of the advertising budgets of major brands, and allow us to provide a greater level of insight and service to our tenants. The technology is already live in 13 Westfield-branded assets in Europe. We will roll out to another 7 by the end of this year, and we'll continue to grow from there. Let's now look at developments, where we are poised to deliver EUR 2 billion of our EUR 2.4 billion euro committed pipeline in 2024.
With focused management and tight control of CapEx, we have continued to deliver on our plan, making a significant positive social, environmental, and economic impact to cities and communities. We have great confidence in harvesting the fruits of our efforts, thanks to the very high level of pre-letting and our recent successes with major deliveries like Westfield Mall of the Netherlands. All of these projects are on track for successful openings in 2024, and the additional net rental income will positively impact our net debt to EBITDA ratio. In October, we shared a comprehensive evolution of our Better Places sustainability roadmap, aligned with our strategy to strengthen our core business, build new revenue platforms, and maximize the value of our assets.
The plan establishes net zero targets that have been approved by the Science Based Targets initiative, as well as additional targets on waste reduction, water conservation, and biodiversity. Last month, we published the results of an in-depth study that measures the positive impact of URW centers across four key areas: economic, environmental, social, and the common good. This is the first time a commercial real estate company has published a report that measures its impact at a regional, country, and asset level. Our diligent and focused approach consistently positions us as a leader in our industry, and the evolution of our Better Places plan continues to receive recognition. In January, URW was ranked as one of the 100 most sustainable corporations worldwide by global research company, Corporate Knights, and just this week, we received a CDP A rating for the sixth year in a row.
In 2023, we continued to deliver on our Better Places targets. We have reduced carbon emissions on our entire value chain by 43% and are on track to achieve 50% by 2030, including net zero on Scope 1 and 2. This has been accomplished with a clear focus on our energy consumption and intensity, which we have reduced by 30%. We have also made good progress on increasing our solar PV capacity, including activating the largest solar installation on a shopping center roof in Germany. One of the innovations we shared at our October event is the Sustainable Retail Index. Our strong belief is that brands with credible plans for their own environmental transition will be the ones who are successful in the future.
To better understand the commitments and progress our tenants are making, we have partnered with Good On You, an Australian sustainable brand rating agency. The Sustainable Retail Index combines Good On You methodology and a store-level assessment, which allows us to better understand retailers' sustainable practices and plans. We have already launched the assessment process with 800 fashion tenants at our shopping centers in Europe, looking at 2,500 stores that make up over 50% of eligible revenues. Based on preliminary data, 82% of these eligible revenues are from tenants engaged in some level of sustainability activity, with 52% rated active, advanced, or leader. This provides valuable insight into the durability of our revenues in the context of increasing consumer attention to sustainability.
As announced in October, our target is to assess 70% of our eligible revenues annually by the end of 2024, at 100% by 2027. We look forward to updating you on our progress as part of our commitment to the sustainable evolution of retail. Better Places is helping to future-proof our portfolio, both in terms of its environmental performance and by ensuring that we are working with the retailers of the future. It also enables us to access sustainability-linked financing. In December 2023, we raised EUR 750 million from a new green bond, our first in the euro market since 2015. The success of this bond issue was also made possible by the positive response to the 2023 hybrid exchange offer.
This was the first transaction of its kind by a corporate issuer and supported by more than 90% of bondholders, of which over 60% went on to participate in the green bond. With the exchange, we are proactive in offering a comprehensive and balanced solutions to fixed income investors while maintaining the group's solid capital structure, rating, and continued access to credit markets. Now on to deleveraging, where in 2023 we secured EUR 1 billion of transactions on 11 assets. This is a significant achievement in a challenging investment market, which saw an over 50% decrease in transaction volumes versus 2022 in our geographies. These disposals have contributed EUR 5.1 billion to IFRS net debt reduction since 2021.
We are fully committed to our deleveraging plan, and we are currently in active discussions on over EUR 1 billion of assets across the U.S. and Europe. Our plan is supported by our strong operational performance, 2024 project deliveries, our tight CapEx control, and our liquidity position, which all enable us to execute at the right time and in an orderly manner. Since 2021, we have consistently worked to overcome the Covid crisis and deleverage the company. Our 2023 results confirm the operational recovery of our business, and our solid progress on deleveraging has led to a net debt to EBITDA ratio below 2019 levels. The improved visibility of our operating performance, the delivery of major development projects in 2024, and our strong liquidity position give us confidence to reinstate a shareholder distribution for fiscal year 2023.
We will therefore propose a cash payment of EUR 2.50 per share for approval at our AGM in April, to be paid on May 16th, 2024. Going forward, it is our intention to significantly increase our distribution based on operating performance, de-leveraging progress, and the evolution of valuations. On behalf of the group, I would like to thank our shareholders for their support over the past three years and express our confidence in the future. With that, I will hand it over to Fabrice and be back to cover our guidance ahead of the Q&A. Over to you, Fabrice.
Thank you, Jean-Marie, and good morning, everyone. URW achieved strong financial results in 2023, and all of our main KPIs, including rent collection, MGR signed, vacancy, like-for-like EBITDA, are back to or better than pre-COVID levels. Thanks to the sales performance of our assets and the value of our stores to retailers, we've also been able to pass on inflation via indexation and sales-based rents. Together with a reduction in vacancy and positive rental uplift, this has translated into strong like-for-like net rental growth. And we also secured additional debt reduction, driving a further improvement in the group's net debt to EBITDA ratio. Adjusted recurring earnings for 2023 totaled EUR 9.62 per share, a 3.3% increase on 2022. Excluding the impact of the increased hybrid cost following the exchange offer completed in June, recurring EPS was up 5% year-on-year.
Our guidance for 2023 was at least EUR 9.5 per share. We added slightly above that figure, thanks to a strong finish to the year in terms of rent collection, variable income, and cash remuneration. Like-for-like net rental income increased by 6.1%, thanks to a strong performance in shopping centers and offices, partly offset by convention exhibition, which reflected event seasonality in 2023 and the subsidies we received in 2022. This performance led to a 6.7% increase in like-for-like EBITDA. So let's take a closer look at our EBITDA trajectory on a group and like-for-like basis since 2019. Total EBITDA reflects the impact of the circa EUR 8 billion of disposals since 2019, partly compensated by deliveries, including Westfield Netherlands and Trinity.
On a like-for-like basis, excluding the impact of these disposals and deliveries, C&E seasonality and FX, 2023 EBITDA is back to 2019 levels. We have achieved this earlier than the 2024 target we announced at our Investor Day in March 2022, demonstrating the strength of our assets and our proactive management. This EBITDA is consistent with the level communicated for Europe at our Investor Day, with further increase expected in 2024 from deliveries, like-for-like net NRI growth, increase in retail media revenues, C&E performance, and general expenses savings, mitigating inflation impact. Let's come back now to the key components of our 2023 AREPS. As you can see, the key drivers are the positive like-for-like NRI performance from shopping centers and offices, as well as the reduction in general expenses and financial expenses that I will comment on later.
This more than offsets the EUR 0.78 impact on lost rents from 2022 and 2023 disposals, and the EUR 0.19 impact of the increased hybrid cost. As already mentioned, convention exhibition primarily reflect the effect of event seasonality as well as the subsidies received in 2022. Moving now to net rental income for shopping centers, which was up 8% on a like-for-like basis, including 9.7% in Europe and 6.2% for U.S. flagships. This performance was supported by indexation, which provided a positive effect of 6.5% in Continental Europe and 4.4% at group level. The impact of strong leasing activity in previous quarters is reflected in the renewals and releasings column.
This contributed 2.9% to like-for-like NRI growth, thanks to the rental uplift and vacancy reduction achieved, in particular, in the U.S. and the U.K.. Sales-based rents had a slightly positive impact in 2023, thanks to Europe. U.S. sales-based rents were down 3.2% for flagships, reflecting the higher SBR settlement seen in 2022, and a proactive conversion of SBR into MGR through the leasing activity mentioned earlier by Jean-Marie. Doubtful debtors were up slightly in Continental Europe due to bankruptcies, and there was also a negative impact of doubtful debtors in the U.S. due to a base effect from 2022 reversals. Last, we saw a positive contribution from retail media, parking income, utilities revenues, as well as the settlement of rent discounts and property taxes, all these items being included in the other category.
Our 2023 performance was supported by the group's ability to pass on inflation via indexation and sales base rents. Indexation, based on 2022 inflation, made a 6.5% contribution to 2023 like-for-like NRI performance in Continental Europe. Our capacity to pass on inflation was demonstrated by high rent collection, standing at 97% for 2023, in line with pre-COVID levels. H1 2023 rent collection is now 98%, up from the 96% we reported in July, and we have also collected another EUR 58 million of rents from 2022, taking rent collection for the year to 98%. Sales momentum and inflation also translated into +3.5% SBR growth on a like-for-like basis, mainly driven by Europe.
SBR represented 5.8% of 2023 NRI for the group, including 4% in Continental Europe, 8.1% in the U.K., and 10.3% in the U.S.. Bankruptcies are back at normal levels, having fallen to record lows in H2 2021 and full year 2022, due to both government support and COVID-related rent relief. Overall, the COVID period resulted in a stronger tenant base with higher sales performance. The number of stores affected by bankruptcies stood at 355 in 2023. They represent 3.5% of total stores, but only 2.5% in MGR terms. It was 3.3% of the total stores and 2.8% of MGR in 2019.
In total, 87% of total units affected are still occupied by existing tenants or relet, limiting the effect on 2023 vacancy. A third of the stores and over 40% of the MGR affected by bankruptcies were in France due to the end of French government support to weak retailers. Overall vacancy as of December 2023 decreased by 110 basis points to 5.4% back to its pre-COVID level. In Continental Europe, the vacancy rate increased slightly to 3.2%, mainly due to bankruptcies in France and the Nordics, departures of some international brands in the Nordics, as well as lease expiries in Austria. U.K. vacancy decreased significantly from 9.4% in December 2022 to 6.9% in December 2023.
Westfield London, so its vacancy dropped below 10% for the first time since the 80,000 square meter extension opened in 2018. Westfield Stratford continued to demonstrate low and still decreasing vacancy, now below 4%. U.S. flagship vacancies stood at 7.3%, below 8.2% at year-end 2022, and below pre-COVID levels of 7.7% in 2019. Overall, MGR signed in 2023 amounted to EUR 449 million, a 7% increase compared to 2022, and 28% more than 2019. This high volume of activity allowed us to reduce vacancy, as I've just outlined. The primary focus of our leasing activity is the signing of long-term deals.
The MGR signed on long-term deals in 2023 stood at EUR 351 million, a 14% increase compared to last year, and up 23% compared to 2019. The proportion of long-term leases increased to 78% for the group, close to pre-COVID levels. In the U.S., long-term leases increased from 63% in 2022 to 72% in 2023, reflecting a strong demand for URW's assets. Demand for space in our assets is also visible in the rental uplift achieved in 2023, reflecting a pricing tension as vacancy decreases and tenant sales increase. The group uplift in 2023 was 6.8% on top of indexation and 10.6% for long-term deals. The performance was especially strong in the U.S., with a 32.7% uplift on long-term deals.
This sharp increase in MGR uplift is explained by long-term renewals and re-lettings at rents significantly higher than the short-term deals signed at a discount during the COVID period. In Continental Europe, the uplift stood at 2.7%, including +4.4% on long-term deals on top of indexation. Adding the impact of indexation, the uplift at group level would be above 10% and 15% for long-term deals. Moving now to our occupancy cost ratio, which stands below pre-COVID levels in Continental Europe at 15.3%. Strong tenant sales growth has absorbed the effects of indexation, rental uplift, and increased service charges, primarily due to higher energy costs.
In the U.K., OCR decreased to 18.5% as a result of stronger tenant sales and a decrease in business rates since April. In the U.S., OCR for flagship assets is also down compared to 2019 at 11.4%, with the tenant sales increase exceeding the impact of rents and SBR evolutions. And as we have demonstrated previously, the volume of activity generated by omni-channel retailers in stores goes well beyond sales figures that are used to compute the OCR. This additional activity includes click and collect and store returns, which have a huge value for retailers, are strong contributors to the margin, but are not captured in the 2023 OCR. The strong performance of our retail assets in 2023 was mirrored by our offices portfolio.
Offices NRI amounted to EUR 84 million, a 14.5% increase, thanks to the leasing activity, the ramp-up of the Pullman Paris Montparnasse Hotel, and the delivery of Gaîté offices in 2022. On a like-for-like basis, NRI was up 22.1%. Leasing progress at Trinity, now 96% leased, was the key contributor to this growth. Thanks to the quality of this asset, four additional leases were signed in 2023 for over 10,000 square meters, at an average rent of EUR 564 per square meter, including EUR 600 for the top floors. This is in line with prime rents in La Défense, with lease incentives below the market average. These lettings helped to reduce the office vacancy rate from 15%- 11% at group level and 10% in France.
This does not include the Lightwell project, a 32,000 square meters office redevelopment in La Défense, due to be delivered in H2 2024 and already 80% pre-let. These lettings all demonstrate the appeal for URW's high quality office space with strong ESG credentials. Now on to Convention & Exhibition. 2023 recurring net operating income amounted to EUR 132 million, compared to 190 in 2022, and EUR 157 million in 2019. As a reminder, 2022 NOI included EUR 25 million in subsidies from the French state to compensate for pandemic-related closures. 2023 was also impacted by the change in seasonality patterns, as certain biennial shows shifted from odd years to even years after COVID. This shift had a negative impact of EUR 23 million of 2023 NOI compared to 2019.
2023 performance reflects the return of major in-person events and a significant consumer demand for experiences. Successful shows included Viva Tech, the Paris Air Show in Le Bourget, the Milipol Security and Safety event, and the Agriculture Show. Our 2024 C&E pre-bookings confirm the significant demand and a high level of commitment for our venues. They represent 94% of the net rental income budgeted for the year, up from 89% at the same time last year. 2024 will benefit from both seasonality patterns and the positive impact of the Paris Olympics and Paralympics. Viparis sites will host a number of events, as well as broadcasting and press facilities. This will further boost C&E performance in 2024, given summer is usually a quieter period.
2023 results were also supported by a 5% decrease in our general expenses to EUR 199 million. Beyond this recent evolution, we have reduced our general expenses by 18% since 2019, despite inflation of 20% over the period. Circa 60% was due to efficiency gains, including headcount reductions, office relocation, as well as lower consulting fees and travel expenses. The rest was attributable to the change in perimeter following disposals and the reduction of our development pipeline. We will continue to be disciplined on cost and pursue further optimization as part of our constant search for efficiencies. Moving now to our portfolio values, which stand at EUR 49.6 billion, a 5.1% decrease versus year-end 2022.
Portfolio values saw a like-for-like decrease of circa EUR 2 billion or 4.3% compared to December 2022. This like-for-like evolution included a decrease of 4% for retail, of 10.8% for offices, and 6.1% for Convention & Exhibition. Disposals had an impact of EUR 1.2 billion, including San Francisco foreclosure in H2. This was offset by EUR 1.4 billion of CapEx, and FX had a negative impact of EUR 0.3 billion, mainly due to the strengthening of the euro against the U.S. dollar. Net reinstatement values stood at EUR 146.7 per share at the end of December 2023, a 5.8% decrease compared to year-end. This evolution is mainly driven by the decrease of like-for-like valuation, mitigated by retained earnings.
Non-like-for-like revaluation was also down as a result of goodwill impairment and certain project depreciation, such as Sisters. The like-for-like value of our retail portfolio decreased by 4% in 2023, including a -9.4% yield impact and a +5.3% rent impact. This yield impact is due to the increase in discount rates and exit cap rates of 40 and 50 basis points respectively, at a time when long-term rates were down in Europe and were flat in the U.S.. The H2 evolution is similar to H1, with an increase in rates partly offset by higher cash flows. Since 2018, the group's retail portfolio has been adjusted downwards by 22% on a like-for-like basis.
In Continental Europe, valuations are down 4.2% in 2023, and -16% since 2018. U.K. valuations saw an increase for the first time in five years, with a 0.6% growth in 2023, including a 0.8% decrease in H1. Overall, the U.K. has seen a total decrease of 45% since 2018. U.S. assets were down 4.7% in 2023, and 30% since 2018, including -17% for flagship asset. One point I wanted to mention, for the first time, exit year NRI assumed by appraisers is above COVID level, confirming the recovery of the group's shopping center performance. This decrease in values, combined with higher rental levels for 2023, resulted in an overall increase in net initial yield of 50 basis points on a same scope basis.
In Continental Europe, this increased from 4.2% in 2018 to 4.9% in 2022, and 5.4% in 2023, and a potential yield, assuming the letting of vacant space at 5.7%. The net initial yield for the U.K. portfolio now stands at 6.2%, a 190 basis points increase since 2018, for what are considered the two best retail assets in the market. The potential yield for the U.K. stands at 7%. The net initial yield for U.S. flagship assets has increased from 3.8% in 2018 to 4.3% in 2022, and 4.8% in 2023. The net initial yield needs to be put in perspective with the growth in cash flows embedded in these prime assets.
Stabilized yield for U.S. flagship assets, based on appraisers' rents estimates for 2026, stands at 5.6%, close to the potential yields in Europe. Focusing now on our retail portfolio in Continental Europe, which represents circa 72% of our total shopping center GMV. Higher net initial yields, together with lower risk-free rates, led to an increase in the risk premium in 2023. Looking at a premium with a long-term perspective, after a peak in 2020 and 2021, today's risk premium is back to normalized level for European assets. These have emerged stronger from the COVID crisis, as they clearly benefit from retailers' increasing selectivity and omni-channel strategies. This should support our cash flow growth, assumed by appraisers at +3.8% per year, including 2.4% from indexation over a 10-year horizon.
Central banks are expected to decrease their rates in 2024, which should also support valuation for prime retail assets. On to development now. The total investment cost of the group's development pipeline decreased from EUR 3.1 billion- EUR 2.5 billion, following the removal of the Sisters office project from our control pipeline. This pipeline includes EUR 2.4 billion of committed projects. Circa 90% of these committed projects will be delivered in 2024, including Westfield Hamburg, Lightwell and CNIT in La Défense, as well as the remaining phase of the Coppermaker Square residential development in London. This corresponds to EUR 2.1 billion of projects, of which EUR 0.5 billion remain to be spent. 86% of the retail surfaces of these 2024 deliveries are pre-let.
This will have a positive impact on 2024 NRI, with a fuller impact in 2025. Following these deliveries, URW's development pipeline will decrease to EUR 0.3 billion, and as a result, CapEx will be significantly lower from 2025. Moving now to net debt and financial ratios. IFRS net financial debt has dropped below EUR 20 billion in 2023, down from EUR 20.7 billion last year. This is mainly as a result of EUR 1.4 billion of retained earnings and EUR 0.8 billion of disposals. This was partly offset by the EUR 1.3 billion spent in CapEx in 2023, as we continued our disciplined approach to investment, with a focus on projects to be delivered in 2024.
The partial cash reimbursement of our hybrid increased net debt by EUR 0.2 billion, but also reduced the amount of hybrid outstanding from EUR 2 billion- EUR 1.8 billion. Pro forma for the disposals of Oakridge in the U.S. and Equinoccio in Spain, signed to date but not completed at year-end, the net debt stands at EUR 19.8 billion. IFRS LTV increased from 41.2%- 41.8% year-on-year, as a result of the value decline, and 41.5% pro forma for the disposals secured. Proportionate LTV was slightly down compared to last year, to 42.8% on a pro forma basis. And since 2020, IFRS net debt has decreased by EUR 4.3 billion, and our LTV has fallen by 3%, even after a 12% decline in like-for-like values.
Our net debt to EBITDA ratio has improved from 9.6 times in 2022 to 9.3 times in 2023, below 2019 level, thanks to both debt reduction and the ongoing improvement in operating performance. We expect to see continued improvements in these ratios, especially thanks to the delivery of committed projects in 2024. Our financial debt is fully hedged against interest rates evolution in the coming years. In 2023, this hedging program protected our cost of gross debt, even in a high interest rate environment. On a net debt basis, URW's cost of debt for 2022 was slightly lower at 1.8%, thanks to the higher deposit interest on the group's increasing cash. This supported our interest coverage ratio, which was stable at 4.2 times in 2023.
Cost of debt for 2024 is expected to be slightly above 2% as a result of the full year effect of debt raised in 2023, in particular in the U.S., as well as lower anticipated returns on the group's cash. 2023 was an active year for the group in terms of financing. We raised a total of EUR 3.3 billion of IFRS debt through mortgage and corporate financings. In December 2023, the group raised a EUR 750 million green bond at a coupon of 1.125% with a seven-year maturity. We saw strong demand for this transaction, which was six times oversubscribed, with a peak order book of EUR 4.5 billion.
This was the first bond issued by URW since 2021, and it was made possible by the successful hybrid exchange completed in June with a 92% participation rate. This exchange supported the group's rating and provided an attractive alternative to a non-call for hybrid holders at a limited cost to the group. As a result, over 60% of existing hybrid holders participated in the new green bond in December. It was also URW's first green bond since 2015 and was fully aligned with the group's green financing framework, which we updated in 2022. In total, two-thirds of the debt raised by the group in 2023 was green financing, including 90% in Europe. Thanks to this financing, the group's cash position has further improved in 2023, standing at a record high level of EUR 5.5 billion.
This compares to EUR 3.3 billion last year. Together with EUR 8.1 billion of undrawn credit facilities, the group has EUR 13.6 billion in total liquidity. The group's average debt maturity stands at 7.8 years. We have the resources to cover all debt maturities for at least the next 3 years, even in a scenario where we raise no new financing and make no further disposals. Based on our cash on hand and the maturities of our credit facilities, our resources in December 2026 will stand at EUR 10 billion. In 2023, we demonstrated the full recovery of activity following COVID, taking our EBITDA back to pre-COVID level. This operational recovery, together with the delivery of the majority of development pipeline in 2024 at high pre-letting levels, provides clear visibility on our future cash flows.
We have also made progress on deleveraging, reducing net debt by EUR 4.3 billion and improving our LTV by 3% despite value decreases. Our net debt to EBITDA ratio is now below its pre-COVID level and will further improve thanks to 2024 deliveries. We remain committed to further deleveraging and have EUR 1 billion of assets under active discussions. Our CapEx needs are also expected to decrease following our 2024 deliveries, while our ESG CapEx will be limited, thanks to the quality of our assets as we presented in October. We will continue to be very disciplined in terms of capital allocation and cost reduction. And finally, we have reinforced our liquidity position and demonstrated our continued access to funding, thanks to our bond and hybrid transactions. All these factors put us in a position to reinstate distributions.
I want to provide you with some more color on our proposed distribution in 2024 and beyond. We'll propose a EUR 2.5 per share distribution to be paid in cash in May 2024, subject to AGM approval. Rating agencies have confirmed that this distribution would have no impact on the group's current rating. Total statutory retained losses in URW SE stand at minus EUR 2.9 billion, so this distribution will be made out of premium, which amount today to EUR 13.5 billion. It will therefore qualify as an equity repayment for tax purposes. In future years, this EUR 2.5 per share distribution will significantly increase based on the group's operating performance, deleveraging progress, and valuation evolution. Deleveraging is a key component of our decision-making around distributions.
On this slide, we have provided an illustration of our deleveraging path over the 2024-2026 period, even in the absence of disposals. Taking into consideration conservative assumptions over the three-year period of recurring profit of around EUR 1.3 billion per year, based on 2023 results, a distribution of EUR 2.5 per share, i.e., circa EUR 150 million per year, and reduced CapEx needs beyond 2024, IFRS LTV, excluding the hybrid, will track well below 40% in 2026, even in the absence of any disposals over the next three years. To be crystal clear, this is a worst-case scenario, as we are fully committed to further deleveraging through disposals. We are also showing a sensitivity analysis of our LTV based on different valuations assumptions.
For the sake of illustration, if our European retail assets were to be revalued based on the estimated cash flow growth over the next three years, while office assets would continue the negative adjustment, this would equate to a 5% increase in total GMV, everything else being equal. Such an increase over this three-year time horizon would take down our IFRS LTV, including hybrid, from 41.6 to below 40%, and even lower with further increases in values. Operational performance and strong liquidity position give us time to continue our deleveraging in an orderly manner, while reinstating a distribution. That's all from me, and I will now hand over to Jean-Marie to comment on our 2024 guidance.
Thank you, Fabrice. Before we open up for questions, I want to cover our 2024 guidance. In 2024, we expect adjusted recurring earnings per share to be between EUR 9.65 and EUR 9.80. The main assumptions behind this are consistent shopping center operating performance, supported by retailers' demand for premium space, growing revenues from large-scale deliveries, the positive effect of the 2024 Olympic and Paralympic Games for our convention and exhibition division, our expanding retail media activities, as well as our ongoing cost discipline. We're also taking into consideration the impact of 2023 and 2024 disposals as part of our ongoing deleveraging plan and our cost of debt with the full year effect of debt raised in 2023, the impact of the hybrid exchange, and anticipated lower returns on cash.
This guidance does not include major disposals in the U.S., which are part of our radical reduction of our financial exposure to the U.S., as well as no major deterioration to the macroeconomic and geopolitical environment. With that, it's now the time to start the Q&A session. Thank you.
Thank you. Anyone who wishes to ask a question may press star and one on their touchtone telephone. Please limit yourself to two questions at a time. Anyone who has a question may press star and one at this time. We will pause for a moment as callers join the queue. The first question comes from Frédéric Renard with Kepler Cheuvreux. Please go ahead.
Morning. I will ask two questions. The first question would be on the situation in the U.S. airport. I see that on a like-for-like level, situation, taking into account the airport is quite negative in the U.S. I would like to see what's your view for next year. And then maybe to the same level in Europe, what is your view on retail sales in the context of some kind of normalization? I mean by that, that retail sales were clearly down on a volume level, but up on a pricing level, and what would be the impact on the MGR uplift? Thank you.
I will start by Europe. I will need to clarify the question on the U.S.. I'm not sure I capture 100% of the question, you know, to start with, but maybe you got it, Fabrice.
It was on the airport evolution, I guess, and the recovery that we've seen on the
Oh, yeah, okay. It was on the airport. I was not sure it was. So if I start by the European sales, you have seen that, you know, globally, our traffic has grown a lot, and the sales have been, as well, you know, growing faster than the national sales indices everywhere in Europe. We have seen as well, you know, a stabilization of the vacancy, despite, you know, some movement of bankruptcy. Some bankruptcies, in particular in Europe and in the Nordics. As demonstrated by the volume of leasing activity that we had, you know, in 2023, but as well in 2022 and in 2021. You see that we have been able to recreate the commercial tension.
So we're very confident, first, in two things: the continued evolution of the traffic, positive traffic that we benefit from, linked to the openings of the new stores that we have signed in 2023, and that will open in 2024. The best marketing for an asset is the quality of its retail mix, and we are confident in the evolution, the positive evolution of our traffic, which will drive additional sales. That creates a commercial tension, and as shown on the graph that I presented, you've seen our ability to recover on the level of MGR, MGR signing globally across our portfolio. We have more SBR in Europe than what we had previously, so we recapture that SBR into the MGR, which will generate-...
Uplift on the lower indexation impact if we look at the evolution of inflation. So positive on the evolution of our MGR and the potential of the uplift. For the airport business, we have seen a strong recovery of the domestic flights or all in passengers coming from domestic are coming back, and we have even a higher traffic in that respect. In the international terminals, we still miss part of the Asian, you know, we say passengers, then customers.
We have also, you know, some terminals that are whether under works or finalization of their, of their leasing, in particular, you know, a part of the, Tom Bradley Airport, which we delivered, like, 2 years ago during, the end of COVID, and that we are finalizing the leasing. So globally, our ends, sales per payment are going up. Traffic is going up. We still miss, you know, a part of the, Asian or Asian customers, but, pretty positive on the evolution of the number of, passengers going through our terminals. We are currently working on 2, major terminals in, New York. JFK Terminal 1, that is under construction, and we have started the pre-leasing.
Currently as well, Terminal 8 with American Airlines, where we have started the works and, as well, the pre-leasing, and that is going, you know, in the right direction. So positive on the trends going forward for the airport.
Thank you.
The next question comes from Pierre Clouard with Jefferies. Please go ahead.
Thank you. Thank you for taking my questions. So I will have two. So coming back on the U.S., do you have a better idea now how you can achieve U.S. exposure reduction? Do you have a plan in mind, what would be your, let's say, scenario in the U.S.? And do you think that the 4.8% net initial yield is achievable, and if the investment market is reopening currently in the U.S.? So, you know, blended questions on the U.S. The second one is on the NRI margin. I saw that you lost 2 points compared to 2022, and you are still 4 points below 2019 levels. Is there anything that we should have in mind, and do you expect it to come back to pre-COVID levels anytime soon?
So onto the U.S. exposure. We have done a very active work on the streamlining of our regional portfolio, which generated more than, or a little bit more than $2 billion, or close to $2 billion of disposals and proceeds from the regional streamlining. We have in the meantime, and you've seen that in the results, get back to a very strong performance for, you know, flagship destinations. The vacancy is 7.3%, lower than what it was before COVID, and we are confident that we'll be able to continue to get that vacancy decreasing. Level of sales is 19% above what it was in 2019, so strong operational performance.
The investment market as such has been, has been pretty, pretty, how we say, tough link to the interest rates environment. The direction of travel, when it comes to the interest rates, looks like, you know, pretty clear, which gives confidence that we'll be able to achieve our radical reduction of our U.S. financial exposure based on very qualitative assets that would be then available. When it comes to, when it comes to, you know, the, the, the valuations, the valuations are the valuations. But if I look at what we have achieved in terms of disposals, globally, in 2023, which includes a lot of U.S. assets, our discount to the, to the GMV was, you know, in the range of 3%, so -3%.
So which is the margin of error within the, within, we said, the valuations. So we'll see where we are. We are optimizing. I think this is what we said as well. We have a strong operational performance, liquidity that give us, you know, how we say, the, the, the ample, you know, security or confidence that we can achieve, you know, in an orderly manner and on due time, the, the deleveraging through the radical reduction of our U.S. financial exposure.
To your question on the NRI margin, you have three main elements that explain this difference. First one is that, obviously, doubtful data had an impact and is part of the computation of the NRI over GRI ratio. So basically, with an increase in the doubtful data component, as you've seen, by the way, on our like-for-like figures, as in 2022, we benefited from a reversal of bad debt provisions after 2021, which was important in terms of doubtful data evolution. So that's the first element which explained this difference.
And by the way, when we restate that for this doubtful data, so when you do the NRI minus doubtful data to GRI, you're not that far from one year to another. The second explanation is due to the U.K. computation. So basically, in the U.K., you include in the GRI the utility revenues instead of netting them, as it would be the case, for instance, in Continental Europe, and therefore, you have a numerator and denominator effect in this ratio.
And ultimately, compared to 2019, we have a few countries or where, in particular in Germany and Austria, where we have a system of capped service charges, which effectively had a negative impact on the NRI over GRI, at a time when service charges were up. And by the way, this was the case in 2023 versus 2022, but we should see a positive evolution in terms of service charges between 2023 and 2024, with the decrease in energy cost.
Thank you, Fabrice. And do you have in mind by how much the NI margin could improve in 2024?
I think if you take the 2019 level, I think that should be a sort of normalized level, or if you take maybe 2020, yeah, I think that that could be a range of guesses that you could take as a proxy that you could take for this assessment.
Okay. Thank you very much.
The next question comes from Jonathan Kownator with Goldman Sachs. Please go ahead.
Good morning. Thank you for taking my question. First question on the dividend: are you able to provide a sort of, a bit more precise, perhaps, view of what the dividend could be in terms of range of payouts that you think, the business could sustain going forward? First question. And for the second question, really looking at going forward, you're obviously going to reduce CapEx with your pipeline. You still have some disposals, interest rates are increasing. What do you see as the main driver of your earnings growth, going forward? And when do you think you would be in a position, also to start reinvesting in the business? Thank you.
On the dividend, I would say, you know, as I said, during the presentation, it's really our intent to significantly increase the distributions, taking into account the operating performance. And we have good visibility on our 2024 performance with the, you know, level of performance that we achieved in 2023, as well, you know, the impact of the positive deliveries that we'll have, you know, in 2024. On the back as well of the deleveraging progress that we'll make. And as well, the asset valuations evolutions that we'll see going forward.
I mean, can we, could we be a bit more, I don't know, I'm not sure specific would be the right word, but are we talking 50% payout, how many pay, percent payout, or, you know, is there a sort of slightly more precise number that we could put behind that, or range or, you know, how you think about it?
As I try to be maybe clearer, so we know going forward, our intention is to increase the distributions. Again, based on their operating performance, the progress made on the deleveraging, and as well, the evolution of the asset valuations. That's really the way we are looking at it going forward.
So it wouldn't be a payout ratio, per se, but it would be growth based on, on business, plus any dividend from disposals. Is that the way to think about it, then?
For the few years to come, and the deleveraging, you know, being progressed, you know, this is the way you can look at it.
Okay. Okay. Then on the growth strategy going forward?
I think on the growth levels, as you've mentioned, so first, we'll continue to see like-for-like growth, and you've seen that it was 8% this year, including 4.4% from indexation. And so we expect also to see for 2024 a further increase on the like-for-like basis. Of course, with an indexation contribution that would be lower than the one that we had benefited from in 2023. And so we'll continue, and in particular, as vacancy decreases and as we benefit also over time from the clip that we've signed. So like-for-like growth will be one of the components.
In 2024, we'll also have, as you've mentioned, the impact of the deliveries, but which will be only on a pro forma basis or only, you know, pro rata temporis, of the timing of the delivery. So we should have a full effect in 2025 of these deliveries. We'll continue also to be, of course, working on our general expenses as mentioned. And beyond that, there are a number of re-tenanting projects, which are, I know, not part of the development pipeline and all that Jean-Marie described about, for instance, El Corte Inglés. There are a number of opportunities on which we are working, all that we are doing on the Ministry of Sound to re-tenant. All tenants should also be growth drivers.
And in parallel to that, as we have said, we will continue to rebuild our control pipeline in order effectively to generate growth in the future. There are a number of projects on which we will be working, which are not ready yet. Let's take the example of Croydon. Let's take the example of Milan, for which we are still the entitlements, but are still working on them.
Okay, thank you. Just if I may, as a follow-up, I mean, obviously, you're, you know, according to your scenarios, you're gonna get pretty close to 40% LTV without necessarily having sold, I would say, majority of the U.S. business. Obviously, you've sold most of the regional exposure. But is there an alternative scenario where maybe you actually don't sell the U.S. business if the economy is strong, the assets are, seem to be performing really well? You know, is there a scenario where you could actually grow rather than shrinking this business or try to see it in a different way, perhaps?
We are committed to our, you know, our deleveraging plan through, in particular, the radical reduction of our financial exposure to the U.S. That remains the way we look at the deleveraging.
Okay. Okay.
The next question comes from Paul May with Barclays. Please go ahead.
Hi, guys. I've got a few questions, but they should be relatively quick. Just on the U.S., and following on from Jonathan's question earlier, I appreciate the strategy has been to radically reduce the financial exposure to the U.S., but strategies should change with changes in operating performance, one would suspect, rather than doggedly sticking to it. And given the valuation of those assets to a previous question, it's probably difficult to see that deleveraging coming through those disposals, because I appreciate you've sold things in line or near book values, but that was after previously writing down those values considerably more than the average across the portfolio. So to sort of say that you could sell the rest at current book values is probably a bit optimistic, one would think.
So it's probably unlikely that you're able to deleverage through disposal in the U.S., and therefore, is there not a change in strategy needed, particularly given that strong operating performance in the U.S., which is, I think, considerably better than in continental Europe, maybe from a operating performance, you should be selling more in Europe than in the U.S. And then there's obviously the sort of added question to that, given the share price performance, is it now not the time to be looking to raise some capital to take advantage of potential opportunities that they could be from others' distress, and kind of taking that leverage question and focus off the table and actually start to focus on what you do well, which is the operating performance? Just wondered. I appreciate there's a few questions in there.
I've got a few other follow-up questions after that. Thank you.
Maybe Fabrice Mouchel had to, what I would say, but first, you know, when it comes to the strategy, so still, this is the way we look at the way we can leverage. And we could have shared, you know, the same sensitivity analysis that we shared several times around, you know, if we were to see a discount to our current GMVs, what is the impact of disposals at discount to the GMVs, and what is the impact on the deleveraging? And then you will see that this is deleveraging. So I will leave, you know, this to Fabrice. And that's, you know, the way we look at our deleveraging progress.
That remains, you know, our, you know, way to, you know, finally or complete, you know, the restoration of the balance sheet. And, the rights issue is not, you know, is not part of the plan. And so we are focused on our plan, which is, you know, progressing, deleveraging through disposals. We have EUR 1 billion of active discussions in Europe and in the U.S., and we are committed to our, you know, deleveraging plan through a radical reduction of our U.S. financial exposure. I think that we'll be helped, in that, respect if we talk about, you know, the appetite as well, by the, global environment, in real estate. You have still, you know, alternative investments that are interested for investors when it comes to real estate, so maybe student housing, data centers.
What's the depth of this market? That I don't know. But if I look at the retail and in particular, you know, the type of assets we own, we see that they are, you know, coming back on the table of potential investors, that are looking at it, you know, totally differently. We've made the demonstration through the operational recovery, that they were very resilient assets and even growing assets. And you've seen, you know, the hypothesis around the kicker of the NRI evolution. You've seen the commercial traction that we have recreated, and how we can capture, you know, some of the major trends that are linked to the polarization of retailers on the best location, which is playing in our favor, and it plays as well in the U.S.
And again, as I said previously, I think the direction of travel when it comes to the rates is pretty clear, so it should help us definitely in what we want to achieve.
Just, just wanted to follow up on a couple of those points. I mean, you've sold assets, but your leverage has gone up. So on the investment point, as you say, it's operating... I agree with you, operationally, you are doing better, and I think Unibail is probably in the best place to operate these assets and to drive best performance. So actually, it's probably better in your hands than it is potentially in somebody else's. And then the mention on the rate side of things, that forward rates are already there. If base rates come down, it's not gonna change investors' opinion. That's quite a consensual view, if you speak to anyone outside of the real estate industry, that people know their financing cost. If base rates come down, it's not gonna drive a massive improvement in transactional activity.
That seems to be consensual opinion, if you talk to anyone outside the sort of the direct real estate industry. So the point is, you are making these assets very well. Deleveraging is not happening through disposals, so I'm not sure what else you can do. But as I said, we can go around in circles on that, forever. Just wondering, on a slightly different point-
Sorry, Paul.
Yes.
Sorry, Paul. You know, talking about, you know, deleveraging and disposals, I mean, over the last three years, we've sold for EUR 5.1 billion of assets. We've reduced our net debt by EUR 4.3 billion, in total, because we continue to invest on projects, in particular, the ones that will be delivered in 2024. So EUR 4.3 billion of net debt reduction, which was effectively a deleveraging. And when you look at the LTV, it has decreased by 3% from 44.7%- 41.8%, and even 41.5%, taking into account the disposal secured, which is again, 3%, decrease. So we have been able to deleverage so far, on the basis of, disposals.
And by the way, selling U.S., even at a discount, you know, as we have provided you with the information through the sensitivity analysis, would contribute further to the deleveraging. But so far, we've been able to deleverage the company, to reduce the net debt, to improve the LTV through disposals. And this is the plan going forward. And as Jean-Marie said, we have ample liquidity to achieve that in the best conditions, so that we can extract the right value for these assets.
I tend to use 2019 as a base level, rather than 2020. But, but I-- the point is that I think that, I think the assets are better in your hands, is, is the point I'm making. Just to separately change in tax, I'd say on the vacant, on the sort of European assets, I mean, vacancy rate in Europe is the only place where it's higher than 2019 levels. I think like-for-like rent due to relettings, renewals, and net of departures is lowest in Europe relative to the other countries. MGR net uplifts have fallen the most in Europe year-on-year, and seem to be, if you exclude indexation, would be negative, I think, from, from just looking at the numbers, but you can correct me if I'm wrong there.
Yet the values of the assets in Europe have materially outperformed the U.K. and the U.S. It doesn't seem to tally. That operating performance in Europe does seem to be worse and worsening. I think bankruptcies are highest in Europe, as well as a percentage of the overall rent, relative to the U.S. and the U.K. So kind of U.S., U.K. has bottomed and is turning, Europe seems to be worsening, and the valuation seems to be materially outperforming. Just wonder of your thoughts there?
I mean, I think you should, you see one side of the equation, which is the rental uplift, but the rental uplift, as we say, is on top of indexation. So what you need to look at on a like-for-like basis, and by the way, the cash flow growth is really the one coming from the combination of indexation and rental uplift. And when it comes to on that front, of course, the uplift was partly reduced by the indexation. If you take the uplift, excluding this impact of indexation or pre-indexation, for long-term deals in Europe, which will be at +11%, which is still a very strong performance.
So you see that one of the big difference is obviously the indexation, which of course allows us to capture reversion earlier, and so this is one of the differences. The second is that when it comes to the vacancy rate, of course, it has increased, but from a very low starting point. We are at 2.5%, we are at 3.2%. There are effectively three regions where we saw an increase, in particular France, where we suffered from higher bankruptcies. But at the same time, as we said, 87% of these vacancies have been pre-let. So overall, you see that the growth embedded in the portfolio in Europe are still very strong.
By the way, this is why we could deliver this 9%+ like-for-like performance.
Thank you. A couple of very quick ones. What's the cost of debt if you exclude the benefit from interest income? Because I think you net in the 1.8%, it's a sort of a net interest cost. Is that correct?
No, yeah, yes, that's correct. So the 1.8% includes the impact of cash. And so basically, a proxy for the cost of gross debt would be, you know, what we have seen in 2022, at the time when the remuneration on the cash was much lower. So it's around two- To the credit of the team, to ensure that we could place this cash at the right terms and generate, again, significant income out of this cash position.
The next question comes from Florent Joubert with ODDO . Please go ahead.
Yes, good morning, Florent Joubert from ODDO BHF. So thank you very much for the presentation. So I would have two question. My first question would be on the reduction of net debt. I think that if we look at the slide 42, we have a clear view on how the debt has been reduced in 2023, and we can imagine how it can be reduced in 2024. My question is as follows: So, is the reduction of net debt an internal target at URW for 2024? And what can we expect in terms of reduction of net debt in 2024 and maybe 2025? So that would be my first question. My second question would be on the guidance.
So we can see that you are in active discussions for the disposal of EUR 1 billion of assets. We would have also the impact of Olympic Games . So how the guidance in 2024 can be considered as conservative? Well, that's my two questions. Thank you.
So regarding the net debt evolution in 2024, it will obviously be highly dependent on the level of disposals. I think one of the key element to keep in mind is the fact that even if we're in a very worst case scenario, and again, which is not the one that we anticipate, even without disposals, the net debt does not deteriorate after the payment of this distribution of around EUR 250 million, which plus the CapEx would be compensated by the cash flow generated by the company.
So that's the first element, and again, as mentioned, the deleveraging, or the debt reduction, will come from the disposals, and there will be no deterioration of the net debt, even if we don't sell assets. Now, when it comes to the way the guidance was built, of course, you still have the impact of the disposals of 2023, impacting 2025, in particular, as there was more disposals in H2 than in H1. As you remember, the level of disposals in H1 last year was EUR 0.3 billion, and we achieved around EUR 1 billion of disposals in the full year.
We expect also to sell assets, so this will have a negative impact, less than the EUR 0.78 that you've seen in terms of lost rents in 2023. So that would be on the negative side. On the negative side, and we'll end up, obviously, with the positive, but on the negative side, you will also have the full year effect of the hybrid exchange offer, which, for which we only had H2 impact, so that next year we'll have a full year impact, and this is around EUR 25 million, so the EUR 0.29 that you've seen, approximately. And the third element will be the increasing cost of debt from, again, from 1.8% - 2%+.
Now, on the positive side, you will have, A, the impact of the deliveries, and so on a pro rata temporary basis, and we have, as we said, EUR 2 billion of deliveries, due to take place in 2024 in a phased way. So this will be partly, this will have, again, an impact over the duration of 2024, with a fuller impact in 2025, but you will still see something in, in 2024. You will have the ongoing improvement, of net trends on a like-for-like basis, with a level of indexation, which will be lower in 2024 than it was in 2023, but that will be supported by the leasing activity and by the, retail media, activities.
As you said, last but not least, you will have the positive impact on the C&E side of two main events. One is the seasonality, and you see that 2023 was a weak year, and this is something that we had already announced to you last year and you see that it has come down from EUR 190 million- EUR 132 million. So it's EUR 190 million, including the EUR 25 million of subsidies, EUR 175 million- EUR 165 million, sorry, to EUR 132 million. So basically, here you have the seasonality that will play in our favor in 2024, plus the additional impact of the Olympics. This only being taken at 50%.
And the last point, it is effectively this one in terms of minority interest, which will partly offset the positive impact of the Paris Olympics. So this is the way we have built this guidance. And again, the three main elements are, again, deliveries, like-for-like performance, C&E activity, partly compensated for the hybrid and the net financial expenses increase.
Okay, thank you very much.
The next question comes from Rob Jones with BNP Paribas. Please go ahead.
Morning, team. Thank you for the presentation. I know you asked to only ask two questions, and I'll respect that. Question one on the divvy. Is there criteria or something that would give you confidence to be able to publish some sort of guidance around either future payout ratio or whatever it might be? Or I guess maybe another way to think about it is, what was missing from the current market environment to give you that confidence, to be a bit more granular or detailed on the divvy? And the second question is a very quick one about CapEx. You spent almost EUR 1.4 billion on CapEx in 2023. That was up from EUR 900 million in 2022.
That CapEx spend is roughly similar to your AREPS, and obviously the dividend then, from a cash flow perspective, comes out on top of that. Can you give any guidance for 2024 CapEx spend? Appreciate you're doing a great job at reducing development pipeline exposure. And then just final one from my side is, best of luck for your, upcoming roadshows as well post results. Thanks.
On the guidance or on the distributions, again, I will say the same thing, but some-
All right. That's fine. Don't worry if,
No, no, no. But it's just explaining, you know, just first, obviously, you have the operating performance, then you have the deleveraging progress and the speed of the deleveraging progress, and then you also, you know, the asset valuations. And that's why we provided you also the sensitivity analysis, that will have an effect on the way we look at... the way we increase, you know, the distributions, but we intend to significantly increase the distributions going forward.
Look forward to it.
When it comes to CapEx, 2024 will still be an important year in CapEx, as we need to deliver these EUR 2 billion of projects. As you've seen, we have EUR 500 million still to be spent on this pipeline. And so in 2024, we continue to have CapEx of around EUR 1 billion, and in 2025 onwards, this will go down significantly, as effectively we'll have delivered this major development project.
Thank you very much.
The next question comes from Bruno Duclos with Invest Securities. Please go ahead.
Good morning. Thank you. My first question is regarding the payout. We have understood that it will depend on the disposals and other things, but if we took into account that the current operational trend is not changing, and are you including the EUR 1 billion disposal under discussion right now in the definition of your payout, the 26% payout, or?
The 26% payout, which we didn't look at it like, you know, as a result. We looked at the way we set the 2.50 was based on the level of CapEx, no evolution of our indebtedness, so that's the way we set, you know, the set the objective for 2023, the distribution for 2023 paid in 2024. So it's not including the EUR 1 billion disposal that we are working on now, and for which we have active discussions.
Then the question will be, you know, how much we are able to achieve out of that, and what are the complementary discussions that will open in the course of the year to continue our, you know, deleveraging effort, as we said previously, this is, you know, our path forward to leverage the company through disposals.
Okay. That means that if you achieve this EUR 1 billion disposal, that would translate into a higher payout?
Our intention is clearly to significantly increase the distributions going forward.
Okay.
Again, based on operating performance, valuations, evolution, and deleveraging progress.
Okay. And my second question is regarding the U.S. CBD shopping centers. Could you give us an update on your strategy for these assets which have still high vacancy? And could you tell us exactly what is the weighting of these CBD centers in your U.S. portfolio valuation?
In fact, those CBD assets now are limited to, it's hard because, as you've seen, in fact, there were two CBD assets before. There was San Francisco, for which we completed the foreclosure, so it's not part of the portfolio anymore. And so the only one left is World Trade Center, and as you've said, there's a high level of vacancy, but there's also a plan to not only retenant, but also sort of change the positioning of these assets more through travel retail. And so this is the activity that will take the time, and this is the activity on which we'll be working actively to again reposition this asset, with also some level of constraints, because we are not the only ones to decide.
You have the Port Authority that we need to deal with, but all in all, the one CBD asset that is left is World Trade Center, on which we'll be actively working.
Okay, this concludes the time dedicated to the additional questions. Now, ladies and gentlemen, I say thank you for joining, and the Unibail-Rodamco-Westfield 2023 full year results present thank you.