Good morning, and welcome to Unibail-Rodamco-Westfield's 2023 half-year results presentation. In H1, our operational performance led to strong financial results, supported by higher tenant sales and the effect of indexation. Segments such as food and beverage, fitness, and entertainment performed particularly well, demonstrating that consumer demand for these discretionary activities, most impacted by the pandemic, has rebounded. Leasing activity was robust, with a record number of deals on a like-for-like basis. This delivered a double-digit MGR uplift as we continued our strategy to focus on longer-term leases. We also completed a successful exchange offer on our 2023 hybrid bond, which was a first of its kind transaction. 92% of holders participated. Our senior spreads also tightened following the transaction, demonstrating the continued confidence of the debt market in URW.
On the deleveraging front, we secured seven transactions, contributing to a net debt reduction of EUR 500 million, showing our ability to find investors for select assets, even in a constrained investment market. We continue to be in active discussions on assets in Europe and in the U.S. We will secure the remaining EUR 0.7 billion of European disposals and are committed to the radical reduction of our U.S. financial exposure. Our strong H1 2023 results builds on our robust 2022 performance, and we are confident this will carry through to the end of the year and beyond. Looking at our financial results in more details, like-for-like net rental income was up 8.2%, positively impacted by our indexation and our strong leasing performance over the last 12 months. Our cost of debt is at 1.8%, thanks to proactive debt management.
Importantly, this is expected to remain stable at around 2% for the next 18 months. This contributed to a 6.6% increase in Adjusted Recurring Earnings Per Share and a further improvement in our net debt to EBITDA ratio to 9.4x, reflecting both our strong operational performance and our debt reduction efforts. The performance of our shopping center portfolio was the main contributor to these results. Tenant sales continued to grow, up 9%, on the back of positive footfall growth, which is up 7%. These figures exclude U.S. regional assets, which now represent less than 1.3% of our group GMV, a figure that will continue to fall as we complete additional disposals.
Our footfall and sales trends were supported by our strong leasing activity, which has increased occupancy up 20 basis points and generated a double-digit MGR uplift on leases signed. These trends also carried through to high rent collection rates, where we reached 96% in the first half, in line with expectations, while collection from previous periods increased to 98%. Taking a closer look at footfall and tenant sales. In Europe, performance was very strong, with footfall up 8% and tenant sales up 11%, driving an increase in sales base rent and other variable income. In the U.S., footfall has steadily improved, with sales growing 4.6% from an already strong 2022 base. Other variable income was stable versus last year. On sales base rent, we see the effect of our leasing strategy, successfully converting sales base rent into minimum guaranteed rent.
Our sales numbers demonstrate the quality and durability of the consumer appeal of our assets. We consistently outperform national indices in all markets. You can see the catch-up effect in continental Europe, resulting from a more impacted H1 2022. This underlines the trend we see of our assets gaining market share as large retailers consolidate their overall store portfolios while growing with their footprints with us. As we look at sales, I want to highlight the strong performance of experience-led segments in H1 2023, which are up 37% for entertainment destinations, up 28% for fitness, and up 18% for food and beverage. The performance of these purely discretionary segments underlines the demonstration we made at the full year as to the quality of our catchment areas and the spending power of our customers, even in a higher inflationary environment.
This appeal translates into leasing activity as well, where these thriving categories represent almost a quarter of H1 lettings by GLA. The strong customer base that drives this significant sales performance is attracting major brands. Knowing the quality of our assets, Sephora chose Westfield for its return to the UK by opening a 726 sq m store at Westfield London in March. The store rapidly became one of Sephora's top five best performing locations worldwide, with sales outperforming their expectations by 300% within eight weeks. This performance demonstrates that when retailers open with us, they outperform the market and even their own expectations. Tellingly, Sephora has now already signed a 692 sq m lease for their second UK store in Westfield Stratford City. The quality of partnership like this is a win-win, enriching our offer and driving footfall and sales performance.
Let's look at our overall leasing activity. Far in 2023, we have signed a record number of deals with a total GLA that is above both H1 2022 and H1 2019 levels. The volume of long-term deals as a proportion of MGR signed, reached 78% of total MGR, fed by the conversion of short-term SBR-focused leases to longer-term deals at higher rents. This has generated a 17.6% MGR uplift on long-term deals. As commercial tension has returned to our assets, we signed new short-term deals at rates almost flat to passing rent, when in H1 last year, they were down by 15%. Our leasing activity also represents our commitment to diversify and refresh our offer with new and innovative concepts and provide the best experiences to our customers.
We are successfully attracting new Digitally Native Vertical Brands to our centers as they convert their popularity to profitability by expanding into physical retail. Major fashion and sports retailers are also expanding and upgrading their space with us to meet consumer demand and optimize their omnichannel networks. We are also introducing and growing new experience tenants to meet the customer demand we see in the sales performance we have shared. Through this activity, we are on track to reach our target rotation rate of 10% per year. On to Westfield Rise. Our European in-house retail media agency launched in H1 last year. With growing footfall in Europe, up 8%, we have been able to increase our average revenue per visit by 18.5% versus last year, mainly driven by higher media advertising revenues.
Our experiential campaign income has remained stable with partnerships with major advertisers such as Netflix, Samsung, and L'Oréal. This has led to a 14% increase in net margin. As of H1, we have secured 47% of the budgeted H2 2023 revenue, which gives us confidence in our ability to outperform 2022 and achieve the EUR 75 million net margin target for 2024, shared at our Investor Day last year. We are highly focused on our deleveraging plan. In a constrained investment market, we have secured seven transactions in 2023 so far. This includes two disposals in Europe and three disposals, along with planned foreclosures of Westfield Valencia and San Francisco Center in the US. These transactions have delivered a EUR 500 million contribution to net debt reduction, taking our total net debt reduction since 2021 to EUR 4.7 billion.
In Europe, we are actively pursuing our EUR 4 billion disposal target. We are confident we will secure the remaining EUR 4.7 billion by the end of the year. In the U.S., we have secured the sale or planned foreclosure of 16 assets since 2021. This represents EUR 1.4 billion of net debt reduction. We are looking to complete the divestment of our remaining regional assets, which today represent less than 1.3% of the Group's GMV. From 2024 onwards, we'll continue our disciplined asset rotation policy. The radical reduction of our U.S. financial exposure remains our path forward. Our strong operational performance gives us flexibility on when we'll execute on this.
This flexibility is supported by several important factors: the strong performance of our business in all markets, as shown by our group EBITDA, which is back to 2019 levels on a like-for-like basis. Our cost of debt, which will remain at around 2% for the next 18 months, our ample liquidity position at EUR 12 billion, which covers all maturities for at least the next 36 months. Our tight CapEx control and our net debt to EBITDA ratio, which is down to 9.4x, below 2019 levels. I want to highlight that this will further improve in 2024 and 2025, thanks to delivery of projects in our committed pipeline, which have weighed on our balance sheet for the several years.
From now until the end of 2024, we'll deliver EUR 2 billion of our EUR 2.4 billion total committed pipeline, which will take our net debt to EBITDA ratio to 8.7x on a pro- forma basis. One project that is already contributing to this is the 19,000 sq m extension of Garbera in San Sebastián, Spain, which was delivered in May and is 99% let today. We have transformed Garbera from a local to a regional destination, broadening its reach and even attracting visitors from neighboring France. 54 new stores include a 5,200 sq m Primark store, the first in the Spanish and French Basque Country. A new dining destination completes the project with a curated collection of international and best local concepts.
Prior to the expansion, Garbera had 4.2 million visits. We are confident we'll reach our target of 7 million annual visits. The project is expected to generate an additional net rental income in the range of EUR 8.5 million-EUR 9 million. Looking more broadly, we'll deliver a significant proportion of our committed pipeline in 2024. More than 80% of the costs related to these projects are already secured, giving us tight control on remaining capital to be deployed. Our projects have high letting, predating, putting us on track for successful openings and additional net rental income, which will improve our net debt to EBITDA ratio. Coppermaker Square, our Build-to-Rent residential development at Westfield Stratford, welcomed residents in January 2023 to its first tower, which is now let at 97% at rents 16% above our underwriting levels.
Looking at our sustainability program, we continue to perform according to plan and are on track to meet all of our carbon reduction targets, including cutting carbon emissions on Scope 1 and 2 by 80% by 2030. 94% of our European retail assets are certified BREEAM In-Use, with 78% rated excellent or outstanding. We also continue to increase renewable power generation at URW assets, which has the added benefit of improving their Energy Performance Certificates. We have already reached more than double the 2025 target and continue to deliver new projects, such as the 550 kW solar panel installation at Centrum Černý Most in Prague. By 2030, we now expect total installed capacity of at least 50 MW in Europe, supplying the equivalent of about 25% of our total common area electricity needs.
In the U.S., we currently have solar capacity of about 8 MW across five flagships. This supply energy for both common areas as well as tenants, driving additional revenue for URW. As announced at our last Investor Day, we are working on a step change evolution of our Better Places strategy that will include our own path to carbon neutrality. We look forward to sharing this with you at an investor event here in Paris on October 10th. With that, I will now turn it over to Fabrice.
Thank you, Jean-Marie, and good morning, everyone. Our H1 2023 financial performance confirms the positive operational dynamic seen in 2022, with further improvements in both terms of tenant sales and leasing activity. Together with indexation, this progress translated into strong like-for-like net rental growth. We also secured additional debt reduction, driving an ongoing improvement in the Group's net debt to EBITDA ratio. Adjusted recurring earnings for H1 2023 totaled EUR 5.28 per share, a 6.6% increase on H1 2022. An 8.2% increase in like-for-like net rental income translated into a 1.6% growth in EBITDA when considering the impact of disposals. For comparative purposes and on a like-for-like basis, both EBITDA and rental NRI, retail NRI are back to or even above H1 2019 levels.
Let's break down now the key components of our AREPS for the first half. The significant volume of disposals completed since 2022, which delivered a EUR 2.1 billion reduction in IFRS net financial debt, impacted the Group's AREPS by a negative EUR 0.46. The key driver is the positive like-for-like NRI performance from shopping centers and offices. The impact from convention exhibition primarily reflects the effect of event seasonality in a recovering sector, as well as the subsidies received in H1 2022. There was also a benefit from the slightly decreasing cost of debt and reduced administrative expenses, even in a higher rate and inflationary environment, as well as lower taxes and impact of minority interest. Moving now to net rental income for shopping centers, which was up 8.5% on a like-for-like basis, including 4.5% from indexation.
There was a positive contribution from retail media, parking income, utilities revenues in the U.K., as well as the settlement of rent discounts, all included in the other category. Doubtful debtors were up slightly in Continental Europe, with higher bankruptcies. We saw double-digit like-for-like NRI growth for Europe. A key point to mention as well is that the strong leasing activity in 2022 is reflected in the renewals and relatings net of departures column. This had a 2.8% positive contribution to like-for-like NRI growth, thanks to the rental uplift and vacancy reduction achieved. U.S. flagship like-for-like NRI growth was up 1.4%, driven by positive leasing activity at 5.6%+ and higher variable income, partly offset by a negative doubtful debtors impact of 4.4%.
This was due to the reversal in H1 2022 of bad debt provisions relating to rent moratorium. Our H1 2023 performance was supported by the Group's ability to pass on inflation via indexation and sales base rents. Indexation made a 6.7% contribution to H1 2023 NRI like-for-like performance in Continental Europe, in line with 2022 inflation. It was also supported by the 8.5% year-on-year growth of SBR, corresponding to a 0.4% contribution to like-for-like NRI growth as a result of retailer sales performance, including inflation, in particular in Europe. The lower figures for the U.S. are due to higher SBR settlement in H1 2022, and the conversion of SBR into MGR.
SBR represented 5.3% of H1 2023 NRI for the Group as a whole, including 3.9% in Continental Europe, 7.9% in the UK, and 8.7% in the U.S. Collection rate for retails stood at 96% in H1 2023, in line with H1 2022 at the same date. This includes a Q1 collection rate increasing from 95%-97% as we continue to collect rent in the second quarter. We have also collected another EUR 40 million of rents from 2022, taking rent collection for the year from 97%-98%. Although collection is taking longer in some situations, tenants are paying their rent even with impact of indexation.
Bankruptcies are back at normalized level, having fallen to record lows in H2 2021 and 2022, due to both government support and the rent relief provided during the COVID period. Overall, the COVID period resulted in an improvement in the quality of our tenant mix, with the bankruptcy of our weakest performing tenants during this period. The number of stores affected is below H1 2019 levels and in line with H1 2021. It represents 2.3% of total stores and only 1.7% in MGR terms. More than a quarter of stores affected were in France due to the end of French government support. These stores, including non-performing brands such as Camaïeu and San Marina, which did not pay the rents. These were fully provisioned and therefore had no impact on our PNL.
Other brands, like Go Sport and La Grande Récré, were taken over by new owners and operators with no impact on vacancy. In total, 89% of bankrupt units saw their tenant still in place or replaced, thanks to strong store performance, limiting the effect of bankruptcies on vacancy levels. Moving now to vacancy. Group vacancy as of June 2023 decreased to 6.3%, compared to 6.5% at year-end 2022, and down from 7.2% in Q1, which had increased primarily due to the seasonality effects. In Continental Europe, vacancy rate increased slightly to 3.6%, mainly due to the bankruptcies I've just outlined, as well as the expiry of short-term deals put in place during COVID in Germany and Austria.
This figure is 30 basis points below Q1 levels, thanks to strong leasing activity, with EUR 56 million of MGR signed in Q2, 26% above Q1. U.K. vacancies decreased from 9.4% in December 2022 to 8.5% in June 2023, with two different situations. The vacancy rate in Westfield Stratford continued to decrease, down to 3.7%. Westfield London vacancy is at 13% and is being proactively addressed through the repurposing of excess space due to the 2018 extension and wider leasing efforts. U.S. flagship vacancy is down to 7.9%, below the 8.2% at year-end 2022, and down from 9.4% in Q1 2023, thanks to strong leasing activity in Q2. U.S. flagship vacancy is now in line with pre-COVID levels of 7.7%.
Overall, MGR signed amounted to EUR 219 million, an 11% increase compared to H1 2022, and 25% on top of the H1 2019. The primary focus of our leasing activity is executing long-term deals. The MGR signed on long-term deals in H1 2023 stood at EUR 171 million, a 17% increase compared to last year and up 20% compared to H1 2019. The proportion of long-term leases increased to 78% for the Group, close to the 81% seen pre-COVID. The percentage of long-term deals increased significantly in the U.S. from around 60% in H1 2019 and 2022 to 71% in H1 2023, reflecting retailers interest for URW's assets.
This retailer demand is also visible in the rental uplift achieved, which reflects higher pricing tension as vacancy decreases and tenancies increase, outperforming core inflation and the market. Total Group H1 2023 uplift was 12.5% on top of indexation and 17.6% on long-term deals, including a 38.8% uplift in the U.S. This sharp increase in MGR uplift is explained by long-term renewals and relettings at terms significantly higher than the short-term deals signed at the time of COVID, during the COVID period at a discount. In Continental Europe, the uplift stood at 4.6%, including a 6.5% on long-term deals on top of indexation. Excluding the impact of indexation, the uplift in Continental Europe would be above 10%.
Moving now to occupancy cost ratio, which has become a more relevant metric in 2023, given the normalized operating environment. During the last 12 months, OCR has continued to decrease further below pre-COVID levels in Continental Europe at 14.8%. This is thanks to the strong tenant sales growth, absorbing the effect of indexation. In the U.K., OCR decreased further to 19.4% as a result of tenant sales increases. Is expected to decrease further in H2, with a decrease in business rates effective since April. In the U.S., OCR is slightly up at 10.7%, with decreased rents, increased rents, partly offset by tenant sales growth. As explained at the full year, the volume of activity generated by omnichannel retailers in stores goes well beyond sales figures used to compute the OCR.
This additional activity includes click and collect and return of product in stores, which have a huge value for retailers are strong contributors to the margin, but are not captured in the OCR. This additional activity did not exist to the same extent in the past, which limits the relevance of the comparison with 2019. The strong performance of our retail assets in H1 2023, was mirrored by our offices portfolio. Offices NOI amounted to over EUR 41 million, a 15.6% increase, thanks to leasing activity, the ramp-up of the Pullman Montparnasse Hotel, and the delivery of Gaîté offices in May 2022. On a like-for-like basis, this was up 17.1% on a group basis, including 26.7% in France. Leasing progress in Trinity was a major contributor to this like-for-like growth.
Three additional leases were signed in H1 2023 for over 5,000 sq m, increasing current occupancy to 85%. This has been achieved at an average rent of EUR 568 per sq m, including EUR 600 for the top floors, in line with prime rates in La Défense, and lease incentives below the market average. This demonstrate the appeal for URW's prime, well-located assets with high sustainability ratings. To convention exhibition, where we saw strong activity and high levels of commitment from organizers. A number of successful shows took place in H1 2023 with high attendance in line or even above pre-COVID levels. As an example, VivaTech 2023 at Porte de Versailles attracted 150,000 visitors, a 21% increase compared to 2019.
This demonstrates the return of physical events and a significant demand from consumers for experiences, as explained by Jean-Marie. Pre-bookings for 2023 represent 95% of the net rental income budgeted in the year. This supports our projection of a return to normal activity in 2023. As explained at the full year, CNE activity in H1 2023 was affected by the change in seasonality patterns for certain biennial shows, shifting from odd years to even years after COVID. This seasonality effect is reflected in the H1 2023 results for CNE. Recurring net operating income amounted to EUR 71 million, compared to EUR 95 million in H1 2022, and EUR 88 million in 2019. As a reminder, 2022 NOI included EUR 25 million in subsidies from the French state to compensate for pandemic-related periods of closures.
Excluding these subsidies and restated for the biennial shows held in 2022 and 2023, CNE 2023 NOI was 5% above 2022. Restated for the shows that shifted to even years, it would be 3.8% below 2019 levels, due in particular to energy cost increase. H1 2022 results were also supported by 2% decrease in our general expenses, despite inflation. Beyond this recent evolution, we want to show you a longer-term perspective. Compared to H1 2019, we have reduced our general expenses by 9%, despite significant inflation of circa 15% over the period. Our general expenses have come down thanks to restructuring efforts, efficiency gains, and office moves. We will continue to be disciplined on cost and pursue further savings going forward.
Moving now to our portfolio values, which stand at EUR 51 billion, a 2.3% decrease versus year-end 2022. Portfolio values saw a like-for-like decrease of circa EUR 1 billion or 2.2% compared to December 2022. Disposals have an impact of EUR 0.3 billion, offset by EUR 0.6 billion of CapEx. FX had a negative impact of EUR 0.2 billion, mainly due to the strengthening of the euro against the U.S. dollar. Net Reinstatement Values to that EUR 150.70 per share at the end of June 2023, a 3.2% decrease compared to year-end. This evolution is mainly driven by the decrease in like-for-like valuation, mitigated by the retained earnings. The like-for-like value of the retail portfolio decreased by 1.9% in H1 2023.
Since 2018, the Group's retail portfolio has been adjusted downward by 21% on a like-for-like basis, revaluing it much earlier than other asset classes. In Continental Europe, valuations are down 1.7% in H1 2023, and 14%- since 2018. U.K. valuations saw a 0.8% decrease in H1 2023, and an overall decrease of 46% since 2018. U.S. assets were down 2.5% in H1 2023, and 29% since 2018. This 29% negative adjustment includes 16%- for flagship assets, while their like-for-like NRI was up 6% over the same period. This decrease in values, combined with high rental levels for 2023, resulted in an increase in net initial yields.
In Continental Europe, this went from 4.2% in 2018 to 4.9% in 2022, and 5.1% in H1 2023. The Net Initial Yield for the U.K. portfolio now stands at 6.1%, a 180 basis point increase compared to 2018, for what are considered the two best retail assets in the market. The Net Initial Yield for U.S. assets has increased from 4% in 2018 to 4.7% in December 2022, and 4.8% in H1 2023. Taking into account the circa 10% vacancy in the U.S., net potential yield stands at 5.5%, including 5.2% for flagship assets.
As in H2 2022, overall valuations have been impacted by an increase in discount rates and exit cap rates of 25 basis points, partly compensated by cash flow growth forecasted by appraisers. This growth takes into account indexation and strong operating performance in H1 2023, and amounts to 3.6% in Continental Europe and 6% for U.S. flagship assets. Moving now to financial ratios. Our IFRS net financial debt has decreased from EUR 20.7 billion- EUR 20.5 billion since year-end. This is mainly as a result of the EUR 0.3 billion of disposals and EUR 0.8 billion of retained earnings.
This was partly offset by the EUR 0.5 billion spent in CapEx in H1 2023, as we continued our disciplined approach to investment and the EUR 0.2 billion partial cash reimbursement for our hybrid. Pro- forma for the disposal signed in July and the planned foreclosures of Valencia and San Francisco, the net debt stands at EUR 20.3 billion. This would correspond to a loan-to-value of 41.7%, compared to 41.9% in H1 2023, and 41.2% as at December 2022, a slight increase as a result of the value decline. On a proportionate basis, the LTV would be almost stable compared to full year 2022 at 43%, pro- forma for the secured disposals and planned foreclosures.
Our net debt to EBITDA ratio has improved from 9.6x at the full year 2022 to 9.4x in H1 2023, once again below 2019 levels, thanks to the Group's debt reduction and the ongoing improvement in operating performance. As our debt continues to decrease, our EBITDA continues to grow, and our committed projects are delivered, we expect to see continued improvement in these ratios. In H1 2023, our hedging program has protected our cost of gross debt at 2022 levels, even in an increasing interest rate environment. On a net debt basis, URW's cost of debt was slightly lower at 1.8% compared to the full year, thanks to higher deposit interest on the Group's increasing cash position of EUR 4 billion as at June 2023.
The Group's cash position has effectively increased further and improved further in H1 2023. Thanks to funds raised, retained cash flows, and the disposals completed, the group strengthened its liquidity position with over EUR 4 billion of cash on hand, compared to EUR 3.5 billion as at December 2022. URW continued to access credit market in H1 2023, raising EUR 0.7 billion of debt on a proportionate basis, both in Europe and the U.S., of which 75% in Europe was sustainability-linked. Together with EUR 8 billion of undrawn credit facilities, the group has EUR 12 billion in available cash and undrawn credit lines. Its average debt maturity stands at eight years.
Thanks to this liquidity, we have the resources to cover all our debt maturities for the next three 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 undrawn credit facilities, we still have resources of EUR 8 billion as at June 2026. The Group's debt maturities over the next three years amount to EUR 7.2 billion in total, meaning that the Group's debt maturities for the next 36 months are fully covered. The group also completed in H1 2023, the exchange of its hybrid with a non-call date in October 2023.
92% of hybrid holders participated in this exchange, receiving EUR 995 million in the form of new hybrid, with a non-call date in 2028, and EUR 155 million of cash. The purpose of this exchange was to ensure we continue to benefit from the 50% equity content of this instrument by rating agencies, which supports the Group's credit rating. This aim was met as both S&P and Moody's confirmed the current rating and stable outlook following this transaction. It was also designed to offer an alternative to a straight non-call for the hybrid holders, who are also senior debt investors. Another cause for satisfaction, the Group's senior spreads have tightened by 20 basis points since the announcement of this transaction, even outperforming the market.
On to development. The total investment cost of the Group's pipeline was stable at EUR 3.1 billion, with Westfield Hamburg representing over 50%. 88% of the costs for this project have now been signed. Pre-letting of the retail component has improved from 73% at year-end last year to 85% to date, ahead of an opening date in H1 2024. Pre-letting of the office component, which will be delivered in 2024, also stands at around a third. In total, committed projects amount to EUR 2.4 billion, of which EUR 1.4 billion has already been invested.
Beyond Westfield Hamburg, other key development projects include the Coppermaker Square residential project in London and the Lightwell office redevelopment, also for delivery in 2024. Regarding recent deliveries, Garbera extension of over 19,000 sq m opened in H1 2023 and was 98% let. This leasing success supported a positive revaluation impact in excess of 5% over the cost of construction. That's all for me. Back to Jean-Marie for some closing remarks.
Thank you, Fabrice. With these strong results, we continue to demonstrate the strength of our portfolio, our operations, and the quality of our customers. Our strong footfall and sales growth across all regions outperforms the market, and we are delivering record leasing levels and robust rental growth. We continue to make deleveraging progress in Europe and with U.S. regional assets. The radical reduction of the Group's U.S. financial exposure remains our path forward and our operational performance, in particular in the U.S., our controlled cost of debt, ample liquidity position, and CapEx control, give us flexibility on when we execute. With these results, we expect our 2023 AREPS will be at the upper end of our full year guidance of EUR 9.30-EUR 9.50.
This confidence stems from our strong operational performance above indexation, our tenant sales, high collection rates, and dynamic leasing activity with double-digit MGR uplift, our controlled cost of debt and visibility on our hybrid cost, reduced general expenses, and deleveraging progress in line with our guidance. As mentioned earlier, we are building on the success of our Better Places strategy with a step-change evolution that will include our own path to carbon neutrality. In this, we see significant opportunities to create value for all stakeholders as a partner to cities in their environmental transition. We'll share more about this ambition at an investor event in Paris on October 10th. Thank you for your time today. We'll now open it up for questions.
This is the conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and one on their touch-tone telephone. To remove yourself from the question queue, please press Star and two. Please pick up the receiver when asking questions. Anyone who has a question may press Star and one at this time. We kindly ask you to please limit your questions to a maximum of two. The first question is from Jonathan Kownator from Goldman Sachs. Please go ahead.
Hi, good morning. Thanks for taking my questions. Two questions, if I may. Given your reduction in G&A and the way you're maintaining also interest costs lower, you've achieved already 55% of your, the top end of your guidance on EPS. Just curious as to why I mean, are you expecting some weakness and some lower HS H2, or is there a chance that you effectively land your EPS higher than your guidance, is the question number one. Question number two, are you able to give us already an outlook on the dividend for the end of the year? Thanks.
Hi, Jonathan, and thanks for the question. Regarding the dividend, it remains our intention to reinstate a dividend for fiscal year 2023, payable in 2024. This decision will take into consideration a number of factors, including the operating performance, the deleveraging progress, and ultimately the credit metrics. On that front, it will at the end of the day, depend predominantly on the valuation of assets that we see in H2 of 2023. The decision will be made at the end of the year, so be announced in February for the announcement of the full year 2023 results. Coming to your first question, regarding the H2 guidance and the implied guidance.
In fact, when you look at H2 2023 versus H2 2022, there are two points to look into. The first one is the hybrid. Basically, in H2 2022, we still had the old hybrid, we will have the impact of the new coupon of the hybrid, with an on-call date in 2028, which represents around EUR 0.18 in terms of AREPS. That's the first element when it comes to H2 2023.
If you compare that also to H1, H2 2022, in H2 2022, we benefited at the end of the day from a positive contribution from an indemnity from El Corte Inglés, which had a 20 basis points impact, positive impact. All in all, when you combine those two elements, the growth that you see between H2 2023 and H2 2022 is, at the end of the day, in line with the 6%-7% that we've seen in H1.
Okay. Okay, thanks.
The next question is from Paul May from Barclays. Please go ahead.
Hi there. I've got a couple of questions. First one on the U.S. asset valuations. In your transactional evidence, which suggest that you know, you either sold at discounts to full year 2022 values at sort of high single-digit discounts or in high single-digit yields on the assets that you sold, whereas the value decline was quite muted. Also, everything that's happening in the U.S. with regard to regional banks and the commercial real estate exposure there, what were the conversations like with your valuers for the U.S. assets over the first half? I suspect they were quite difficult, but that doesn't seem to have come through in the yield or in the value declines over the first half. The second question, just around leverage.
Appreciate it's not your main focus, but the EPRA LTV is now one of the highest in the sector, particularly if you adjust out the goodwill or the intangibles, and that's continued to increase since you've basically not been paying a dividend and have implemented the disposal program. I just wondered why now the credit metrics are seen as being better, despite arguably being worse than when you suspended the dividend, why that might lead you to reinstate the dividend, given the IFRS loss, you don't have to, is my understanding? I just wondered how you plan to reduce leverage moving forward, 'cause disposals and cutting the dividend doesn't seem to have worked from a ratio perspective. I appreciate in absolute terms, debt has come down. Thank you.
Thanks for, Paul, for your question. I mean, starting with the deleveraging. In fact, over the last two years and a half, the debt has reduced by close to EUR 4 billion. The net debt to a EBITDA ratio has improved, and by the way, improved above pre-COVID levels. When it comes to the LTV, it has still come down by 3% from, you know, 44.7%, and here I'm talking about the IFRS LTV, to 41.7%, including this pro- forma disposals and the foreclosures.
Basically, you've seen that we have been progressing and, you know, the disposal that we have completed, Jean-Marie referred to the EUR 4.7 billion of disposals completed over the last 2 years and a half, and the retained cash flows allowed us to reduce significantly the debt over that period. By the way, we will continue to do that. Our aim is still to come down to a loan to value to around 40% on an IFRS basis, compared to 45%, including the hybrid. We'll continue to do that. I think as we mentioned, the radical reduction of our exposure to the U.S. is the path forward.
As we mentioned, it might take longer, and this is why effectively we said that we have the flexibility to decide when we execute on that, and this flexibility is given to us by the operating performance that we have achieved, the strong cash position that we have, and the hedging that also protects our interest coverage ratio.
When it comes to the U.S. valuations or in the discussion that we have with the with the valuers or the appraisers, they have taken into account, you know, a yield expansion. If you look at in the details of our MD&A, you look at the yield impact on valuations, it's close to 8% [inaudible] 7.9%-. This has been partly offset by the strong operational performance that you have seen in our assets, and which they took into account, which has a positive effect. You have a rent positive effect of 5.4%+, which explains, you know, this 2.5%- on the valuations of our, you know, U.S. flagships.
Think that, you know, the remaining portfolio that we have is mainly made of, you know, high quality assets, all ray, A rated and above, and that's almost, you know, the best of the best that you can, you know, find on the market, today.
Cool, thanks. Is it possible to have a quick follow-up or not?
Please do.
Okay, thank you. Just on the leverage question, I appreciate if you pick kind of the highest point that it's down, but, you know, it is still materially up versus pre-COVID on an LTV basis. I'd say we, yeah, fully appreciate the absolute debt has reduced and, you know, credit to you for doing that. Just wondered how you do think about that LTV metric and, cause arguably, the only real way to reduce that in any meaningful sense is to have more equity, whether that's new equity issuances or whether that's aggressive disposals. I think the latter is probably quite difficult given the transactional market.
I just wondered how you wanted to sort of look at that, because I think more investors are looking at that EPRA LTV as a metric for your leverage. Thank you.
We'll as we said, we'll continue, you know, to first secure the 700 million EUR, sorry, of European disposals. We are on track to achieve that by the end of this year. Which will complete our, you know, EUR 4 billion of disposals in Europe. We are continue to streamline our U.S. regional portfolio. We have five remaining assets, and we have active discussions, and we expect to, you know, are confident that we continue to streamline this, which will generate additional proceeds. The path forward is still the radical reduction of our U.S. financial exposure. We have the time to do it. The operating, you know, performance is there.
Our assets are, you know, even gaining market share. You've seen that the consumer confidence in the U.S. is at the highest point over the last two years, reaching 117 from 110 in June. A higher level since July 2021. Which tells a lot about, you know, the consumption that we see as well in our assets. We see that, you know, continuing. We progress on our leasing activity, and we are going further into getting the vacancy down, which will have a positive effect. We have ample liquidity, we have time. There is no existential question, we'll leverage through the radical reduction of our U.S. financial exposure.
Cool. Thank you.
The next question is from Markus Kulessa from Bank of America. Please go ahead.
Yes, good morning. Thank you for taking my question. I have a follow-up on the implied H2 AREPS. Maybe if you can bridge me on half year versus half year. I understand the H2 versus H2, but it's a big decline versus H1 on that sense, basically. You talked about EUR 0.18 coming from the hybrid co-coupon. Is there some exceptional or some increase in admin costs, which now is cyclicality in H2? This would be my first question. On the disposals, because we have different figures, I suppose it's the difference between IFRS proportionate, just to make sure if in H1, effective, it was EUR 0.3 billion, or EUR 0.5 billion, or EUR 0.9 billion, which I saw somewhere. Thank you.
On the net debt reduction, for H1, the one that has been achieved is EUR 0.3 billion on an IFRS basis, and including the Mission Valley transaction that has been signed and the planned foreclosures, this would increase to EUR 0.5 billion. This is why we have computed this pro- forma figure. If you take that, not on IFRS basis, but on a proportionate basis, this EUR 0.5 billion would become EUR 0.9 billion. That's, you know, the way figures tie together. By the way, the pro- forma loan to value that we have given, I mean, the pro- forma loan to gain, we have given it both in terms of IFRS and in terms of proportionate.
You see a higher impact on a proportionate basis, in particular, due to the treatment, the accounting treatment of San Francisco, which was consolidated partly under the equity method, the same as Mission Valley. That's the first element. To come back to your question, the second, I mean, as you said, the first element would be explaining H1 versus H2 is the hybrid, which has an important impact. The second is the seasonality of the CNE activity, which will also have a negative impact in H2 2023 compared to H1.
Ultimately, the disposal impact, in particular, you know, the ones that have been recently signed and the one that we're working on, which will have an impact and deteriorate H2 compared to H1 of this year.
Okay, thank you. If I have time for just a very quick one on the like-for-like growth, the details on the 5% like-for-like growth coming from others?
Yes. In fact, you have half of that comes from, you know, I mean, more than half of that comes from variable income. You know that, in that category, as I've mentioned, you have all that relates to the retail, media, and the parking activities, which are included in this. You have also the utilities revenues, in particular in the U.K., which are part of that. As mentioned, the remainder is rent discount settlement. Basically, that we had provided for and which we didn't have to grant, which explained this growth, in particular in Europe.
This is gone in H2?
Yes. I mean, the settlement is gone in H2. What we expect to continue in H2, on the contrary, is the parking, the variable income contribution, the parking contribution, and the retail media contribution, which is likely, again, to continue at the same pace.
Okay. Thank you very much.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Jaap Kuin from Kempen. Please go ahead.
Yeah. Hi, good morning. My question is on the I guess same slide in the presentation. On the split of like-for-like, you flagged that the U.S. flagships see a negative adjustment on doubtful debtors of 4.4%-, which is quite a sizable number. Maybe it's part of a bigger question on how do you explain the kind of different moving parts in the U.S. that this seems quite negative in terms of bankruptcies, but then reversion is very high, but overall vacancy is still at 10%? Could you kind of paint a full picture on those items together, please?
The other category, when it comes to the U.S., as mentioned, was relating to the fact that we had some bad debt reversal in 2022, in H1 2022, which were related to the rent provision that were taken in H1 in 2021, regarding rent moratorium. You, as you remember, in certain states, there were a moratorium that was imposed with a high level of uncertainty on whether we'll be in a position to collect the rents, and therefore, this had been provisioned in 2021. And this could have been reversed in 2022 as those retailers paid the rents.
Now, when you look at the U.S. flagship, I think the key points to look into are the fact that, A, it was mainly driven in terms of growth by the rent components, the leasing component, which had a 5.6% positive contribution. This was slightly offset by a negative contribution from, you know, sales-based rent, which was connected, as I've mentioned, to the fact that there was a conversion from SBR to MGR in H1 2023. The third element, which is important, is that we saw also an increase in the variable income revenue, and as we said, it's retail media also that increased in the U.S. On a like-for-like basis, it was around 8%, 8.2% increase on the retail media side.
These were the main components that explain this. Ultimately, when you look at the vacancy, in particular, again, the flagship assets, the vacancy has come down from 8.2%- 7.9%. As we said, it was close to the pre-COVID levels of 7.7%, which shows that there's a very strong dynamic when it comes to the leasing activity in the U.S. The third element or the last element to highlight that and to support that, is the fact that the proportion of long-term deals has significantly increased in the U.S. from 60%-70%, which is also another sign of the robustness of the performance of our flagship assets.
On the 4.4% doubtful debtors, is that a precursor to higher vacancy levels again, or should I look at that differently?
No, it's a gain, as I said, this is mainly due to doubtful debtors, which is due to the reversal that took place in 2022 and which does not take place in 2023.
All right. Okay, cool. Thank you.
When you look at vacancy, the bankruptcy rate in the US, it's still limited. It's 1.6%, so it's not really a, there was not a, big increase in that respect in the US.
Okay, thank you.
The increase in bankcruptcy is more skewed towards Europe, in particular France, which would corresponded to one quarter of the units impacted by bankruptcies.
The final question is from Bart Gysens from Morgan Stanley. Please go ahead.
Hi, good morning. Bart Gysens from Morgan Stanley. I had a quick question. I mean, it's a tricky one, but we've seen you handing back keys in the U.S. on malls that you think, look, you know, financially, it makes sense for us to walk away from that JV investment or so on. That's never a great sign for a market, right? Now we're seeing that also in Europe. Hammerson said today that it's handed back the keys on O'Parinor, a relatively large Paris mall, 12 million visitors a year, traditionally by Unibail standards, a large mall. Yeah, it decided to walk away from its joint venture and handed back control to the lenders. Is that a watershed moment? Is that an important point, or you think that's a one-off and not really relevant for the French shopping center market? Thank you.
When you look at the performance of, you know, globally, some of our peers that have already, you know, shared their results, looks like that, you know, globally, physical retail is doing great. That, you know, I think it's more when I look at this situation, I think I look at it more like a one-off than a major trend in the shopping center industry in France.
Okay, thank you.
Gentlemen, there are no more questions registered at this time.
Okay. Thank you. Fabrice and myself appreciate, you know, your time, and thank you for all, you know, joining us today. We look forward to seeing many of you in October for our sustainability event. Thank you. Have a good day.