Good evening, and welcome to our H1 2020 results presentation. It's an unusual setup today. I'm here in Paris at URW's headquarters, and Jaap is in the U.S. I trust the technical teams will help us run this presentation as smoothly as usual. I'd like to begin with a couple of words to summarize this first half. Our focus throughout this unprecedented crisis has been to mitigate its impact on our group. Q1 had started off positively, be it in leasing, with 446 deals signed, intended sales and footfall up 2.2% and 2%, respectively, and in terms of rent collection, at 94% for Q1. The COVID-19 pandemic hit our operations late February in Europe and the U.S., with most of our centers forced to close from March 16.
Our focus immediately shifted to preserving our liquidity and supporting our communities and our tenants through various relief schemes. I'm very happy that in this very specific period, we managed to finalize the disposals of five French assets as planned, and as announced at our full year 2019 results in February, in a context where many operations of such kind did not close. Then, as confinement measures were gradually lifted in Europe, we concentrated on restarting our operations and implementing a very strong health and safety protocol. As we see our footfall and sales improving weekly, our focus is now on rent collection and on finalizing tenant negotiations. Let me say here that the teams at URW really did a fantastic job in the first half, in an extremely adverse environment, often at a distance.
I'd like to warmly thank them for their achievement, with a special mention for the field teams, which stayed on site during the whole period to allow essential stores to continue to operate, then to ensure we could safely welcome back our customers as our centers reopened. I will start with the global financial results at group level. The adjusted AREPS for H1 2020 reached EUR 4.65 versus EUR 6.45 in H1 2019, a decrease of -28% or EUR 1.80. Out of this amount, 16 cents are due to disposals made in 2019 and 2020, 22 cents to the ending as from this year of the capitalization of leasing fees, and EUR 1.45 linked to the impact of COVID-19 on our operations and financing expenses. Jaap will provide all the details on this COVID impact in his presentation.
Minus 14.2% for the group's like-for-like NRI, split as follows by sector, minus 11.3% for the shopping center division, of which minus 6.7% in continental Europe, plus 0.4% for the office division, and minus 73.2% for our convention exhibition business, severely hit by the pandemic, with all events canceled as from March 9. EPRA Net Reinstatement Value stands at 197 euros, a decrease of 13.9% versus end of 2019. Jaap will, as usual, give all the details in a moment. Now on to the explanations on how the COVID-19 pandemic has impacted our business and on the mitigating measures we've put in place. As you can see here, our regions have been unevenly affected by closing and reopening measures.
Centers in Germany were the first ones to be allowed to reopen, followed by Austria and Poland. Although most centers in France were reopened from May eleven, we suffered from a prolonged ban on centers above 40,000 square meters in the Paris region and Lyon, which affected us more than any other player, given the concentration of our portfolio on flagships in these regions. Centers in Sweden and the Netherlands were never formally ordered to close, but of course, suffered from the stay-at-home instructions. As you know, the situation in the U.S. has been particularly hectic, with states gradually lifting restrictions, starting for us in Florida from May fifteen. California, and just recently, New York State, were the last ones to ease restrictions, but Westfield World Trade Center is still not allowed to reopen.
Reopening in the US were then affected by the tragic killing of George Floyd, and just 10 days ago, stores in enclosed mall areas in California have had to close again for what we hope is only a limited time. Overall, our weighted average closure period was of 67 days, and there are still some specific local restrictions for cinemas, gyms, and restaurants, like in Spain. As stated previously, one of our main focus at the beginning of the crisis was to preserve liquidity. We drew on credit lines, raised EUR 2.2 billion of bonds, and issued commercial paper under ECB and Bank of England programs. We canceled the final dividend, saved or deferred approximately EUR 500 million of non-essential CapEx, and removed a further EUR 1.6 billion from the development pipeline. Partial activity and furlough schemes were implemented everywhere.
Headcount was reduced in the U.S. and the U.K., and we also severely cut non-staff expenses. This will enable us to save EUR 60 million in gross admin costs on an annualized basis. Thanks to all these measures, we had ample liquidity as at end of June, with a record EUR 12.7 billion of cash on hand and undrawn credit lines. Throughout the crisis, URW's priorities has also been to protect the health and safety of our people and to support the communities in which we operate. Our local teams rose to the challenge with many local initiatives to support health care professionals or individuals most affected by the situation. We received lots of positive feedback for our actions, and I'd like here again to thank the teams for their unwavering dedication.
Naturally, our tenants were also at the forefront of our minds, and in order to not weigh on their own liquidity, we immediately deferred the rents of April as well as for May in most regions. We took the stance to not make any final decision on potential rent relief in the middle of the crisis, so as to not negotiate in the dark without even knowing when the centers would be allowed to reopen, nor having any idea of how the customers would respond in the early weeks post-reopening. Ad hoc discussion therefore started in May and are still ongoing. As governments started to lift confinement measures, our main priority switched to making sure we took all necessary actions to ensure a safe reopening of our centers.
In partnership with epidemiologists and our partner, Bureau Veritas, we developed our own Safe & Healthy Places label to make our centers the safest place to shop. An in-depth audit is performed by Bureau Veritas before the label can be granted to any center. The safety of our staff and visitors remains our main priority today. We successfully concluded on 29 May 2020, the disposal of a 54.2% interest in five French shopping centers, with net disposal proceeds for URW of EUR 1.5 billion. As you can imagine, the process was not easy and required several weeks of intense discussions, as well as a rental guarantee and a participative loan and earn-out agreement. I'd like now to give some details on how business is going since the centers reopened in Europe. We do not have enough history in the U.S. yet to be relevant.
We split our centers into three groups. The first group is composed of those centers that reopened at the end of April or beginning of May, and have been therefore operating for 11 to 12 weeks. We see a steady improvement in footfall figures since reopening, with up to 80%-90% of last year's footfall. The second group is composed of the Spanish and the last French centers, which we opened more recently. Although with less history, they show a similar trend to group one. Although in the last two weeks, centers in the Barcelona, Barcelona region have been affected by a new surge of the virus and the decision of the Catalan government to close down cinemas, gyms, and leisure operators, as well to limit 50% of the capacity of restaurants.
The third group now is composed of the four centers located in business districts and served mostly by large public transport hubs, namely Westfield London and Westfield Stratford City, and which only reopened on June fifteen, and Westfield Les Quatre Temps and Forum des Halles in Paris, which reopened on June four and June fifteen, respectively. These are obviously suffering more, given the fact that people have been encouraged or even required to work from home until the summer break. Offices in business districts are still, on average, below 50% occupancy, and people are also still pretty reluctant to travel on the tube or local trains. This graph, seen in a recent Kempen newsletter, thank you, clearly shows that while 70%-80% of people in continental Europe are gradually back at work, only half the people in the UK have actually returned to the office.
At the end of February, before Covid struck, we were off to a pretty good year. What we can see now is that people shop more individually. Shopping is undoubtedly more efficient. While the virus is still around, people have reduced their dwell time, and restaurants and cinemas, which usually account for 15%-25% of the center's footfall, are still restricted. All this mechanically leads to higher conversion rates and higher average baskets, and is translated into sales performing above footfall. Sales figures for the whole of H1 are totally meaningless, of course, given the sixty-seven days of closure. However, for the sake of transparency, we give you the complete figures in the MD&A. Much more interesting, of course, are the sales of the month of June itself, at minus 19.7%, which is pretty encouraging compared to initial expectations.
This figure includes cinemas and restaurants, which were either still closed or only partially open that month, and fashion, shoes, bags, and accessories, and department stores, which are all affected in France, our main market in Europe, by the government's decision to postpone the beginning of summer sales from 24 June 2020 to 15 July 2020. Excluding these categories, sales in June would be minus 7.6%, with sectors such as home, culture, media, and food posting positive or stable sales compared to last year. To be confirmed, but this shows early but positive signs of recovery. As far as rent collection goes, if Q1 is not an issue, Q2 and Q3 still need a lot of work. Q2 figures reflect the decisions we made to postpone the rents of April and May to Q3 and Q4, as well as ongoing tenant negotiations.
To put it simply, tenants want to have more visibility on the outcome of negotiations before they release the payments of June rents. To put it even more simply, we will grant no rent relief if we are not paid what tenants owe us. For having led a certain number of negotiations myself, this has been well understood by everyone. Q3 reflects the same negotiations, as well as the general approach of accepting that payments be made monthly as for Q2, to allow tenants to improve their liquidity just one month or so after reopening.... I'm not saying that negotiations are easy, far from that, but they are progressing relatively well in Europe. There's a bit more, they're a bit more difficult in the U.S., as the reopening situation there is more complex. There's no one size fits all.
Negotiations are made on a case-by-case basis, and based on two very simple principles: one, fairness, and two, sharing the burden. This has been generally well received. We're not granting relief for tenants that traded well throughout the crisis, nor canceling service charges. We're, of course, giving more relief to very small companies or to F&B operators, which are the ones which suffer most from the lockdown and a slower recovery. In return, we ask tenants for concessions, such as extending the firm period of the leases, increasing the SBR percentage, waiving co-tenancy clauses in the U.S., or signing leases for new stores. As you would expect us to, we refuse to switch to pure variable rents. We estimate we're now roughly 25% through the process, still a long way to go, but fully at it and progressing well.
Now, a brief focus on the more usual operation, operational highlights, obviously affected by the COVID-19. After a strong start of the year, a lower level of leasing activity, of course, in H1 in Q2, 661 leases signed this half, down 44% versus H1 2019. No mystery, negotiations are tougher. Hence, a major achievement in the middle of the crisis, double-digit MGR uplifts in France, plus 15.4%, in Central Europe, plus 14.1%, and in Spain, plus 29%. Overall, plus 5.5% in continental Europe, despite a strong down lift in the Netherlands. The UK and US markets are much more difficult, even more so that in these two regions, the weight of relettings, as opposed to renewals, was unusually low, at 21% and 40%, respectively.
You know that MGR uplifts are, in general, lower for renewals compared to relettings. Our exposure to bankruptcies varies by region. This is monitored on a day-by-day basis, obviously. Group-wide, 92% of affected units are still trading or have been replaced. So the potential impacts of bankruptcies on an annualized basis amounts overall to 2.7% of the group's retail MGR. But of course, several tenants will emerge out of bankruptcy or will be replaced along the way. COVID had an adverse impact on vacancy, which remains, however, under control, reaching 6.8% for the group versus 5.4% at full year 2019, of which 3.9% versus 2.5% in continental Europe.
The uptick in vacancy is due to new bankruptcies in H1, as described a minute ago, linked to or accelerated by COVID, and to delays in relettings due to retailers being more in a wait-and-see attitude during the lockdown. This will have to be closely monitored and dealt with in the coming weeks and months, in parallel with the risk, of course, of further bankruptcies or CVAs. Despite this context, we opened a significant number of new stores across our portfolio in H1, including a 2,500-square meter Decathlon at Mall of Scandinavia, at Westfield Mall of Scandinavia, a Primark at Gropius Passagen, Hollister at Westfield Les Quatre Temps, and some more DNVBs, such as Indochino at Westfield Valley Fair, and Allbirds at Westfield UTC. A very symbolic achievement was the opening of the first ever Harrods outlet at Westfield London on July three, to replace Debenhams.
A world premiere, not only replacing a failing retailer, but also bringing the most desired name in UK retail to our flagship center, as well as a wide selection of new brands. Performance is above expectations, we hear, and there has been extremely positive press coverage. We also achieved major successes in terms of new signings in H1, including Lucid Motors, which is the best contender to Tesla in the upmarket electric car segment, signed at Westfield Valley Fair and Westfield Century City. Uniqlo at La Part-Dieu, a new Rituals store, approximately three times larger than their previous one at Westfield Mall of Scandinavia, a Legoland Discovery Center at the future Westfield Hamburg, as well as Aritzia, Peloton, IWC at Westfield Valley Fair, and Anthropologie at Westfield Valencia.
Of course, H1 is almost ancient history now, and I'm sure a lot of you have questions about the future of retail in the post-COVID world. We're only two months and something out of confinement, and there are still, of course, major uncertainties. It's obviously way too early to draw final conclusions, but I'd like to share a couple of convictions, based not on wishful thinking, but on observations. Not based on my own behavior, but on the behavior of our customers. The first question relates to the share of e-commerce in the post-COVID world. I've read so many different comments on this one. Naturally, during the lockdown, all retailers saw a spike in online sales, and even more obviously, in the proportion of online sales, click and collect, and curbside delivery on their global sales, since their physical operations came to a complete or almost complete halt.
Online penetration has grown during the period, mostly because people who were not using the internet to buy food started to do so, and also because shoppers somehow had no other choice but to shop online while they were stuck at home. This graph shows credit card transactions in store and through e-commerce in France. It shows, it's just an example, of course, but it shows that the share of online has increased, but also that online sales have actually declined during six of the eight weeks of the lockdown, and have somewhat come back to pre-crisis levels, implying a more limited ratchet effect than initially anticipated. Too early to tell. Undoubtedly, though, e-commerce penetration will have been boosted. The question is, by how much? Six months, one year, two years, more?
Management consultant firms seem to agree that the jump will be of approximately one year, but it might be more. Only time will tell. As an anecdote, I was talking last week with a very successful restaurant operator who has restaurants in Paris, London, and soon Madrid. When his restaurants were all closed, he designed a click-and-collect service that reached 50% of his previous business. 50%, it's huge. I asked him whether or not this service had decreased since the restaurants reopened. The answer is yes. To how much? Well, to virtually zero. Why? Because if customers come to his restaurants, they prefer to eat there because they have a fantastic atmosphere. So they will close, actually, their click-and-collect service, but in parallel, they will have opened a brand-new home delivery service.
This is how fast situations change these days, so it's much too early to draw final conclusions. As always, also, the question that comes when discussing online is the one around the profitability of online sales. No doubt there will be, in the future, a mix between online click and collect, with lower delivery costs and an opportunity to bring the customers to the shops, and shopping in physical stores, which offer convenience, accessibility, and experience. One thing is clear, just like for my restaurant operator, people gradually go back shopping in physical stores, as proven by the queues in front of the most popular stores, as seen on this picture at our Splau center in Barcelona, and by the June sales figures. Because after all, people like physical places.
When French people were asked during the lockdown about what they wanted to do once they would be allowed to, of course, this is, again, one example, 33% said they would go to a shopping center. In ninth position out of 38 possible answers, I have to say I was surprised, happily surprised. 41% said they wanted to go to a restaurant or a bar, 26% to the cinema, and even 23% to a department store. We're not the only ones who believe in the omni-channel model. Leading retailers and DNVBs alike agree on its importance. There will certainly be less stores in the future, and this is fine with us. For a long time now, you've heard us advocate that selectivity is the key word in retail. Stores, however, will remain an essential part of retailers' operation.
Not standard stores, not everywhere. Stores in carefully chosen locations in the best catchment areas, and the focus will be, more than ever, on creating real in-store experiences. We are indeed, definitely in an omni-channel world, and our strategy to embrace this at URW relies on two pillars. One, digitizing the experience of our visitors and customers to further engage them, and two, to create more value for our retailers by extending their online sales. All the services and activities we create are serving these aims to achieve a global and unified omni-channel experience, directly or through partnerships, and we're accelerating such partnerships with the best-in-class digital pure players like Zalando and its 13-million-plus active users by giving access to our retailers' inventory to increase their sales. Deliveroo, Uber Eats, or the likes, to foster home deliveries from the restaurant operators of our centers.
Transaction Connect or Thanks in the U.S. to build our transactional loyalty program, or Brut, an online video news platform, to reach out to a renewed audience. The preference shift for new consumption patterns, for more local and secondhand products, for sustainable brands, has only accelerated in the first six months of 2020, both for consumers and for employees. These changes are at the heart of our Better Places 2030 strategy, launched in 2016 and extended to the U.S. and the U.K. in 2019. As part of pillar one, better spaces, great achievement in H1 by our U.S. teams, with Palisade at Westfield UTC obtaining a LEED Gold certification in April, and URW U.S. being listed among the top 30 companies generating and consuming green power on site by the U.S. Environmental Protection Agency.
For better communities, the second pillar, on top of the support provided to local communities during the COVID-19 crisis, our assets offer growing sustainable consumption options, with Too Good To Go, for instance, working on reducing food waste, and the largest urban farm in Europe, inaugurated a couple of weeks ago at our convention exhibition site of Porte de Versailles. Finally, for better together, our third pillar, URW has built a strong commitment to volunteering over the years, which certainly triggered the full mobilization of our teams during COVID-19. This CSR strategy and efforts have been recognized in H1 2020. URW was reconfirmed in major CSR indices, such as Euronext Vigeo indices and Ethibel Sustainability Index Excellence, Europe and Global. Recognized and rewarded in June, the group achieved for the first time a score of B in the ISS ESG rating.
We rank in the leaders group and are, like in 2019, awarded the Prime status, which highlights our best-in-class approach. Now, after this pretty long chapter on retail, a word on offices and our C&E business. During the crisis, we've all had to adapt to new ways of working on a very short notice. Today, now that life's starting again, at least in Europe, we hear, there again, competing narratives regarding this time home working. Yes, working from home is great. Companies didn't collapse. They can save money that way, and employees save time commuting... but not being together hurts creativity and kills serendipity. I might be a bit old-fashioned, but I consider it's hard to attract talent, to build a team, and to manage a company without meeting face-to-face, eye-to-eye, with group dynamics which are much harder to achieve through a computer screen.
Not to mention, that the conditions to work from home are not always ideal. 73% of employees do not have a dedicated place to work, and 16% even say that they do not want to work from home in the future. So what will be the share of home working tomorrow, and what will be the future need in office space? It's difficult to say. Most people in the U.S. and the U.K. have probably not been to their offices since mid-March, and will not till early September, at best, or even later. Just like retail is not physical or digital, but both, my conviction is that it will not be either office or home working, but both.
I think it's safe to assume that offices will remain, but that space requirements and design will change, and that home working will grow from, say, one day per week pre-COVID, in the most modern companies, to maybe two, two or maybe three a week. At URW, we definitely reinvent the way we work, since we have taken the decision to move our headquarters to our soon-to-be-delivered Trinity Tower in La Défense, which will be the opportunity to totally rethink our work organization and further foster teamwork, boldness, and agility. Our convention exhibition business has been hit very hard by the COVID crisis. Activity stopped, as I said, on March 9. 125 events had taken place before the lockdown, but 191 have since then been canceled, and 95 postponed.
The good news, that was just confirmed this Monday, is that we got the green light to resume operations on September 1. 235 events are planned for H2 at this stage. We expect, in this business, a recovery from 2021, and a back to normal situation in 2022, before the 2024 Paris Olympics, expected to have a positive effect as from H2 2023. Now on to development. During this first half, we once again performed an in-depth analysis of our pipeline and removed a further EUR 1.6 billion of projects, including Westfield Milan and brownfield developments in Spain.
Around 500 million of projects were delivered, so our overall pipeline is now EUR 6.2 billion, down from EUR 8.3 billion at year-end 2019, and EUR 10.3 billion at mid-2019, and it will shrink further as we deliver EUR 830 million of projects in H2. Out of these EUR 6.2 billion, EUR 2.2 billion have been invested to date, so EUR 4 billion remain to be spent, of which EUR 1.6 billion are committed. Although we've had to take severe measures during the crisis, we have confidence that our now smaller development pipeline will continue to play a significant role in our growth and value creation. The pipeline projects correspond to 1 million square meters of new, refurbished, or restructured GLA, of which now only 32% in retail, 30% in offices, and the rest in dining, hotels, or residential.
A clear illustration of our strategy to introduce more mixed-use components in our destinations. Our major projects will deal with the repositioning of space in our standing assets, such as the repurposing of House of Fraser at Westfield London into a co-working space, and for which we just received planning permission. H2 2020 will be very active in terms of deliveries, including Trinity and the La Part-Dieu extension, although the COVID-19 crisis has affected schedules by between two to six months, as well as leasing. Westfield Mall of the Netherlands has been pushed back to H1 2021. Westfield Valley Fair was delivered on March 4, with the new Bloomingdale's, and had to close 12 days later, then reopened, then close its enclosed parts again. We hope we can reopen it very soon. This is it for me.
Now I will hand over to Jaap, who will give you all the details on our latest disposals, our balance sheet, and other finance matters. Thank you, and now we see if it works. It does.
Thanks, Christophe. One of our most immediate objectives when the coronavirus pandemic hit was to further bolster liquidity. It may have been somewhat more expensive than before, but in this half, we raised almost EUR 2.2 billion in bonds, with an average coupon of 2.3% and an average maturity of 9.3 years. This has allowed to pre-fund the repayment of EUR 2.1 billion of all upcoming 2020 maturities, as well as extending the average maturity of the group's debt. As you can see, the average cost of debt ticked up by 10 basis points to 1.7%, of which 1.1% for euro-denominated debt, and 3.6% for US dollar-denominated debt. The steps we've taken this half have increased the average debt maturity to a new record of 8.5 years.
As a result, our liquidity, as of June 30, stood at EUR 12.7 billion in cash and undrawn lines, which is also a new record. Out of an abundance of caution during the half, we also drew down EUR 3.2 billion of our bank lines. All functioned as expected, and we've repaid them during the half. While normally we prefer not to stockpile cash, times were sufficiently unsettled that we decided to take a more prudent stance. As of June 30, our cash position was EUR 3.4 billion, compared to almost EUR 500 million as of December 31, 2019. Of course, the incremental liquidity did not come for free. Our interest expense increased by EUR 13.7 million, mostly because of the cost of securing the incremental liquidity, but we believe this was the right thing to do. As this chart shows, we have no maturity cliffs.
The commercial paper includes GBP 600 million we issued under the Bank of England's COVID-19 facility at a cost of 49 basis points. All the commercial paper is backed up by our existing credit facilities. As to disposals, we've made good progress against the objectives. In February 2019, we had increased our disposition target to EUR 6 billion worth of assets, of which now 80% has been completed. With the additional EUR 2.8 billion, a slight increase from what we announced in February this year, the total target is EUR 8.8 billion since December 2017. So out of the EUR 4 billion remaining, and to be executed in the next couple of years, a little bit less than half is retail.
We are currently in several advanced processes, which, upon completion, should generate almost EUR 1 billion in proceeds, which is approximately 25% of the remaining target. We obviously aim for the best pricing as the assets we're disposing of are very high quality. However, we'll take a very pragmatic approach towards achieving these disposals and to manage our leverage down. Speaking of leverage, as at June thirty, our LTV came to 41.5%, a little bit above the upper end of our target, and I'll get to the valuations in a second, but part of the explanation of the change since December 2019 is that the gross market value of the entire portfolio came down by 5.1% on a like-for-like basis.
This was largely due to the retail valuation declines in the U.S., minus EUR 613 million, in France, minus EUR 581 million, and in the U.K., minus EUR 535 million. As Christophe noted earlier, group NOI during the period was down by 15%. This, as well as the slightly higher interest expenses I just mentioned, resulted in an interest coverage ratio of 4.2 times, calculated on a trailing six-month basis. Now, we continue to get questions about how our loan-to-value calculation squares with some of the much higher numbers that get thrown around in the market. As we discussed during our investor days last year in London, we present our loan-to-value as defined in our covenants, as this LTV calculation governs access to our liquidity.
I understand why equity holders look at this differently, but we're consistent with IFRS and our covenants, and this is what our lenders ask us to report to them. The LTV calculation we communicate on is very simple. Net financial debt, excluding current accounts with non-controlling interest, divided by total assets, which are externally appraised. Effectively, the GMV of our assets are EUR 56 billion, plus EUR 1.8 billion of cash flow generating intangibles, mostly developments, property, asset management, and airport revenues, and EUR 800 million of future fee businesses, as appraised by the appraisers who make assumptions about the renewal of the contracts that have led to the valuation of the EUR 1.8 billion of the cash flow generating intangibles. The assets do not include the EUR 1.4 billion of goodwill, not justified by the fee business.
These values are, as required, calculated as per the group's IFRS financial statements, so not on a proportionate basis. Lastly, because under IFRS, the hybrids are classified as equity, the hybrids do not count as debt in the calculation. When you look at this formula, you see there's ample headroom under our covenants. Now, you know us by now, we don't provide guidance or speculation on how much values could go down by. So we only provide here as an illustration, with some indications of what could happen if values for the shopping centers, convention, exhibition, and services were to go down by 5, 10, 20, or 25%. So for instance, if values were to fall by another 5% from June thirty, this would represent a further drop in values of EUR 3 billion.
An additional 10% drop from the June thirty values would mean a valuation loss or decrease of EUR 5 billion. Now, if we say, if the portfolio were to drop by the same order of magnitude as during the great financial crisis, this would correspond to an additional 20% value decrease from where we are today, meaning EUR 11 billion, or an outward net initial yield shift of 124 basis points, and that still would leave us with additional headroom for a further 10% drop before this 60% loan-to-value covenants would come into play. Now, all of this is not to say that we're nonchalant about where we are, or that it is not a top priority, nor, of course, are we saying that we expect a 30% drop in the value of the portfolio.
It's just to confirm that there remains more than ample headroom under our covenants, and that although you are free to calculate your own LTV, which differs from IFRS, you can't really compare these results to our covenants. Something new. The new EPRA KPIs after the old NAV metrics were replaced by these new KPIs. We consider the EPRA Net Reinstatement Value to be the relevant metric, because the NRV aims to highlight the value of net assets on a long-term basis... Since the aim of the metric is to reflect what will be needed to recreate the company through the investment markets, based on the current capitals and financing structures, related costs, such as real estate transfer taxes, are included. Some may prefer the EPRA Net Tangible Asset metric.
We do not consider it to reflect the total value of our business, as it ignores the value of the intangible assets and the fee businesses, which are valued at about EUR 1.5 billion, as of June thirty. They are an integral part of our business model, as they are for many other real estate companies, as the industry has evolved and has become more operational. This value, these cash flows generated, that are generated, they're long-term, and they cannot simply be ignored in terms of valuation of the company. We've included in the appendix to the press release, a recalculation showing the bridge between the prior metrics and the new EPRA valuation metrics.
As of December 2019, the EPRA NRV was EUR 228.80 per share, adjusting for the almost EUR 6 per share as a result of the dividend paid and the mark-to-market of financial assets, the pro forma 2019 NRV, EPRA NRV, was EUR 222.90 per share. The principal elements of the evolution of the June 30 NRV, reduction of EUR 25.87. The elements here are the recurring EPS of 4.82 per share for the period, and the negative asset revaluation move of EUR 26.26 per share, which is made up of the non-like-for-like change in investment properties, impairment of goodwill, and the revaluation for all in all, for a total of EUR 10.56.
A like-for-like revaluation of minus 5.1%, out of which 4.2% in continental Europe, 13.9% in the U.K., and 5% in the U.S. The like-for-like valuation across the region is driven by a negative rent effect of EUR 3.60, and a negative yield effect of EUR 12.10. All necessary detail is in the appendix of the press release, and I'd invite you to address detailed questions to Sam and Martin after the call. The P&L and the balance sheet as impacted by COVID. It's clearly generated a number of complications in the accounting to account for the effects of the pandemic. With respect to the P&L, the full impact of negotiations with tenants is not yet reflected.
As Christophe mentioned, only about a quarter of the negotiations have been completed by June 30. And remember, we did not start with these retailers until after the reopening of the centers in question. And in negotiations with tenants, we get concessions in exchange for rent relief. You know, for example, the ones that were described by Christophe, new opening of stores, extending break options, more sales-based rents, and the like. Now, under IFRS 16, we have to straight line the rent relief over the remaining firm period of the lease, which might be, by the way, be extended as consideration for the relief granted by us. So this means that there can be a mismatch between the income statement and the cash flow effect. Just to note, in the half, we've granted 32.6 million EUR of rent relief. That's the total cash impact.
However, in the H1 P&L, the impact is only 15.6 million EUR. The rest has to be straight lined. We think it's approximately four years, based on the leases that have been signed to date. There is also an impact on the balance sheet as well. Working capital has increased significantly, as our receivables have, of course, gone up by almost 500 million, 493 million to be exact, on a proportionate basis, because of the deferrals we've granted tenants during the crisis. This is also somewhat difficult to see in our balance sheet, though, as we've benefited from a large VAT refund. Because we have deferred April, and in many cases, May rents, they have not hit our usual 90 or 180 days, after which you can start taking provisions for doubtful debtors.
As of June 30, we have provisioned only for debtors about which there are significant credit concerns, which is obviously a minority of the tenants. Ultimately, our collection of these receivables will be a function of collecting what we've voluntarily deferred, the outcome of negotiations with tenants on rent relief and compensation, and if needed, our success in lawsuits. We've already done so in some instances. Obviously, at risk remain further potential bankruptcies and deferrals. As Christophe referenced, we're in the middle of these negotiations, where he, Michel, Jean-Marie, are all personally involved in an effort on a daily basis. They're making good progress and are confident that most tenants will pay. On the basis of what we've seen so far, we expect we will collect a very significant portion of these EUR 493 million.
With respect to the adjusted recurring earnings for the half, we've prepared a bridge to show you the details of the evolution of the H1, adjusted recurring earnings per share versus H1 2019. The impact of the disposals of Jumbo in Q1 2019, Majunga in Q3 2019, and Ring-Center in Q4, as well as the five French assets in May, the impact there was EUR 0.16. The impact of expensing internal leasing fees for the first time this year was EUR 0.22. The COVID impact, as far as we've been able to precisely ascertain, has impacted the AREPS by EUR 1.45.
The key components here are the P&L impact of the rent relief granted and charged to the income statement, all of EUR 0.11; doubtful debtors, EUR 0.57; lower sales-based rent, commercial partnerships, media income, and parking, EUR 0.25; as well as less service income, fewer leases signed, for example, EUR 0.21. The 73% decline of convention and exhibition revenues impacted the P&L on a net basis by EUR 0.24. Lastly, higher financial expenses, as we increased liquidity, impacted the P&L by EUR 0.07. In addition to the EUR 1.6 billion of projects removed from the pipeline, as Christophe discussed, we have deferred EUR 500 million of mostly smaller non-committed projects and operating CapEx.
For the remainder of the year, we expect to spend approximately EUR 600 million in development and replacement CapEx for a total of EUR 960 million in 2020, with most of the development CapEx for projects to be delivered in the next 18 months. As to the general expenses, we've saved on personnel costs through partial employment, furlough schemes. As development pipeline was scaled back, an adjustment of the corresponding staff was obviously, unfortunately, to be made as well, and in a very difficult business environment, we've also further reduced headcount through our agility program in the U.S. and the U.K., and non-staff costs have been reduced as well. Collectively, these steps should save about EUR 40 million in 2020, and save about EUR 60 million in gross admin expense on an annualized basis.
Now, with respect to the outlook, I'm sorry, I hate to dash expectations, but the performance through June 30 was significantly impacted by the pandemic. In March, like most companies in many sectors, we've withdrawn the guidance due to significant lack of visibility about the duration and impact of the pandemic on our operations. We said we would provide an update on our guidance when we can reliably estimate the duration, severity, and consequences. While 95% of our centers by value in Europe and the US have reopened as of June 15, several of our centers have had to close again following an order by the state of California, and you heard Christophe talk about Catalonia. But this illustrates the continued uncertainty around the financial impact of factors that are beyond our control.
Also, negotiations with tenants about the recovery of rents for the second and third quarter are still ongoing, and we also expect, and it's likely, there will be more tenant bankruptcies. Lastly, the recovery of the variable income, such as sales-based rent, commercial partnerships, parking income, airports, are all very much traffic driven. So at this point, we believe that the uncertainty about the duration and the impact of the pandemic on the operations and financial results remains material, and that therefore, providing an update of the 2020 guidance is not yet appropriate. We'll do so as soon as we gain visibility, and we can provide an accurate enough figure, which is what we understand you expect from us. Now, in conclusion, these are unprecedented times for all of us.
We're all working really hard, and I trust we are collectively taking all necessary measures to address these challenges in the best possible way and to prepare for the future. As a group, we have a high degree of confidence in the quality of our assets, the enduring strength of our business, and the total motivation of our teams. And with that, let me thank you for your attention and open it up for questions. Thank you.
Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. Our first question comes from the line of Stuart McLean from Macquarie. Please go ahead with your question. Your line is open now.
Good evening. I was just looking to understand a little bit more, around the bridge from recurring earnings to cash. So you've given some of the building blocks. So earnings were EUR 667 million. Is the way to think about it, should I, deduct from that the change in receivables balance, for the consolidated entity? So that's EUR 400 million. So it gets me down to EUR 267 million that are more kind of cash flows. And then deduct an additional EUR 15 million, for the rent relief, deduct EUR 124 million, and I'm closer to a cash number of EUR 230 million. I hope you can understand my math there. But just some color around that and how to think about kind of actual cash collection.
I think those, the numbers that you can see, if you compare the P&L to the cash flow statement, that gives you the biggest, if you will, delta between the accounting implications and the cash flows themselves. What you'll obviously see is a significant change in working capital, which is impacted by the fact that there are still a lot of rents that are actually outstanding. In terms of the actual delta, I didn't follow all of your numbers, and we can talk about this offline. But in terms of cash collection, there is. Christophe gave you that bridge in terms of what had been the relief which had been granted, which was 3%, right? And then we've deferred about 30%, and 39% is still outstanding.
So those are the key numbers. And the stuff that's overdue, you know, that hasn't been voluntarily deferred by us, is most likely a function of the negotiations that are currently ongoing, as retailers hold off paying that until the overall negotiations are settled. But as Christophe said, we do expect to get paid.
Can you please, maybe there's another way, provide the, EUR million number, of the, the total cash that you would have expected to receive or, what's been invoiced that hasn't been received? Be it combination of rental relief and what's been agreed to be deferred, and also, what, what you're expecting to get in, where negotiations haven't yet started. Can you give us that number there?
I think the best way to look at this, look at our bridge, multiply it by 138.4 million shares to get you the total numbers, right? Now, in terms of what we expect to collect, that's not something we're gonna put out there today. You'll appreciate that the moment there is anything that's out there, that becomes a self-fulfilling prophecy. We have good expectations about having a significant amount of the accounts receivable that we've indicated to be collected, the vast majority of it.
Okay. And then my second question is just on that. So if I take the provision of €0.55, multiply that by 138 million shares, that's about 80 million EUR. On the change in receivable, it looks to be about 20%. You know, why is that the right number? Why isn't it lower? Why isn't it higher? Why is circa 20% the right number that you're not expecting to get back?
I think the doubtful debtors are a function of a couple of things. Under IFRS, we can only take provisions for doubtful debtors if there's significant risk of the tenants not being able to pay. So we've seen, particularly in the U.S. and the U.K., as well as in Poland, we've been able to take a number of those provisions that amount to approximately EUR 70+ million. Because we have voluntarily deferred April and May, these numbers that otherwise would have been payable have not yet hit the first 90-day mark. Typically, we provide 50% of overdues that have not been paid that have been overdue for more than 90 days, and we fully provision after 180 days. Simply the math will tell you that as we've deferred voluntarily those rents, they haven't become overdue yet. I hope it helps.
Okay, thank you. And then my final question is just on goodwill, and the impairment there seems to be at EUR 760 million. Only EUR 70 million is against the fee business. What is that goodwill write-down? Most appears to be against the US business.
It's a combination about the US as well as in continental Europe. The goodwill write-down has to be done in accordance with the model in a five-year plan. We've obviously done this testing at the end of December of last year, and there's obviously a requirement that we retest if there's a doubt as to whether or not the test done in 2019 would need to be revised based on the change in business conditions. That we have done, and that has resulted in the overall impairment of about EUR 780 million of goodwill. That is, it's split between goodwill incurred in connection with the Westfield transaction, as well as goodwill that existed previously, that related to the Rodamco merger in 2007 , as well as the acquisition of then MFI in Germany.
Okay, so if we take the U.S. example, EUR 420 million, is that against, I'm not sure, future developments, for example, you might have paid up for when acquiring Westfield, that is unlikely to come through? How do we think about that write-down and what it relates to?
Well, there's a fairly extensive provision in the MD&A. I'd encourage you to look at that. That's where we describe what is, what's happening and how the goodwill was determined and what was impaired. I'm sorry, I'm happy to have this discussion offline to get into this detail. I'm not sure it's entirely interesting for everybody, for everyone on the call, but I'm happy to have a discussion with you later on.
Yeah, no, that might be good. I'm just looking to get clarity on that, given the price paid for WFD. I might also pick up the provisioning question later, as well as the cash flow implications. Thanks very much.
Thank you. The next question comes from Jaap Kuin. Please go ahead with your question. The line is open now.
Yeah, hi, thanks. I've got a couple of questions. Let me start with the July or Q3 rent collection. It's obviously a bit up versus Q2, but what struck me was that actually the US rate of payment is a bit higher compared to Europe. So I was interested in your explanation behind that. What you think drives that difference, considering that the US is still in a bit more trouble compared to Europe? That would be my first question. I will do them one by one.
Do you want to take that, Jaap?
Yeah, sure. I mean, we have, we've been aggressively going after the rents that were due in July, and that includes going after cash deposits, letters of credit, and the bill as well. There is still a significant, as Christophe mentioned, there's still a significant amount of the receivables that we need to settle with the number of the US tenants. Again, there's good progress being made. It's very forthright, right? It's very simple. What I believe is that the voluntary deferral in April, when we reached out to tenants and said, "Hey, listen, we understand your liquidity position, and you can defer the rent for April until Q2," was well received.
And clearly a reflection of, "Hey, you guys understand our business." That does not mean that it becomes easier to collect it all for May and for June, but that's work in progress that Jean-Marie is working on very hard.
Okay, thanks, and then maybe staying in the U.S., I saw the net initial yield of the U.S. portfolio is still actually, I think, ten basis points down at 4%. I guess, what's the reason for this not to move up a little bit, at least? And what's kind of the trigger for a larger readjustment? Would that just be transactional evidence?
The net initial yield, right, is an output, Jaap. So what's happening here is that the appraisers take the DCF approach. They make assumptions with respect to the re-estimated rental values, as well as the reletting of the properties over the period of the valuation model. They discount that back to today's value, and then they divide it by the rent in place for the next 12 months. So if you technically, if you see that vacancy has ticked up in the US, as it did, you'll have less rent over the next 12 months than you might have had before.
But if you divide that rent in place for the next twelve months by the resulting DCF value of the business, you know, the net initial yield, because of the higher vacancy, is mathematically lower, right? So it's not the driver, it's the exit cap rates that really have an impact, and I think they've moved those out a little.
Yeah. Okay. But there was no reason to change the exit cap rate, I guess-
It changed a little bit, and it varies between the regionals and the flagship as well.
Okay. All right. Then I guess my final question would be on... Well, actually two more. One on the balance sheet. Obviously, you detailed again the headroom you have to covenants. I appreciate that, and obviously we agree to disagree on the LTV definition. And then there's the thing about the credit rating, of course, because I guess at some point that becomes important more quickly than the covenants. So could you maybe elaborate a bit on where kind of the discussion is with the rating agencies? I think there were some mild threats against further downgrades towards the end of the year to maybe BBB.
So could you highlight your thinking on the credit rating, and to what lengths you would go to kind of protect that credit rating? And if that maybe could then also potentially include additional equity, if you feel that your credit rating is in the end very important for your cost of debt and outlook.
Let me first of all say we've been very proactive, and we've had numerous discussions with the agencies over the last couple of months to keep them updated on the developments, the operation developments, and what's happening. We have also. Moody's issued, I think, an update in June without any further ratings actions. We will be updating them, of course, following the discussion, as we're having here, following the release of the numbers, this week, to provide them a further update. In terms of deleveraging, I understand the question.
I think the one element that we clearly have in our favor is the track record we've built up with respect to the agencies and everybody else. I believe that our ability to dispose of assets is not in question, and that's the key element that we're focusing on with respect to the deleveraging. But that focus is through asset disposals, as we've done for many, many years. And then, obviously, CapEx is another lever in the toolbox.
In the end, let's say a notch downgrade, that then probably doesn't hurt you too much. But would you say that the BBB rating is that will be kind of, let's say, in the foreseeable future, kind of an expected rating? Do you agree with that, and do you feel that's the minimum you need?
Liquidity is clearly not an issue, right? And with the amount of liquidity we have and what we believe the operational developments to be, you know, we'll continue to focus primarily on the assets disposals, yeah. I'm not gonna comment on what will or will not be the case. The rating agencies are fully entitled to their view. I would take issue with your assumption about a BBB. So, again, we'll disagree on that one. And by the way, one more footnote, right? You cannot disagree with us on the way we calculate the loan-to-value for purposes of our covenants. That's just the way it is. If for the equity holders, they take a different view, that's entirely correct, but the two are not, you cannot link the two in terms of determining whether or not there will be access to liquidity.
I agree with that. Agree with that. Then maybe finally, just a small question on admin cost. You guide for the cost savings, but if you check the P&L, it seems they're up in the first half. So could you maybe highlight where that comes from?
Yes. I mean, the most of the impact of the admin expense savings, we'll expect to see in H2. And then obviously, we've also seen the impact of expensing leasing fees, whereas previously, those leasing fees were capitalized. This year, we're running them through the P&L and as expense. So that's the EUR 0.22 of incremental impact on the AREPS, and that the letting expenses are included in the admin expense.
All right, understood. Thanks a lot.
Thank you. The next question comes from Sander Bunck from Barclays. Please go ahead.
Hi, afternoon, everyone, and thanks very much for everything. I have a couple of questions as well, and I'll do them one by one. The first one is more of a kind of an admin question, just trying to understand if I understand correctly. Going to page 19 of the presentation, and you call that invoiced rent. Can you just confirm what invoiced rent refers to? Is that the amount of rent that you would usually invoice during a normal Q1 and Q2? Or is it actually that there has already been some reductions in terms of like, from, say, for example, quarterly to monthly, already some other reliefs granted. So it's basically just a number invoiced as a percentage of what you would expect to receive under COVID circumstances. That's the first question.
Sure. That means during Q1, we typically, when we go for most of the countries in which we invoice, and we invoice ahead of time, quarterly in advance. By the time that the COVID-19 basically forced the shutdown of most of the shopping centers, most of the invoices for Q2 had already gone out. So that's what we had expected to what we invoiced in full expectation that I would get paid in normal circumstances. So that's what the percentage refers to.
Okay. So it's invoiced, and that's a proper reflection of what you would have normally invoiced under normal circumstances?
Yes.
Okay, great. Second question I have is also on valuations. And can you just confirm when in your discussions with valuers how much of the current value decline is due to COVID, and how much is due to ongoing underlying challenges in the market? And kind of, have they said anything in conjunction with that, something about the second half of this year and what they will be looking at?
Out of the EUR 2.7 billion, or EUR 2.8 billion of like-for-like revaluation, approximately EUR 2.3 billion was a direct result of COVID. But what basically they have done, they have moved exit cap rates a little, as well as the discount rates up, both of them up a little. They have taken assumptions with respect to lower indexation and lower and lower market growth. And then there has been an impact on them taking some discount to the expected ERVs and cash flows. So very significant, about 83% of the total negative revaluation in the shopping centers is due to COVID. With respect to further values, listen, I can't tell you what it will be.
It's not unreasonable to assume that there will be some further decline in values for the year, as it becomes clearer as to what the longer term impact of COVID are going to be. I think an important component here will also be the H2 cash collection and the willingness of tenants to continue to stay. Bankruptcy will obviously, and vacancy will obviously come into play as well. So all of those elements make this a little bit of a moving target, but I wouldn't be surprised to see some further, you know, exit cap rates or discount rate increases of, based on the, what's likely to happen or what they think is happening or what kind of transaction evidence emerges in H2.
Okay, fair enough. And the last question from me is on the dividend. I mean, obviously, that's very difficult to comment on that, given that you don't wanna update an RF guidance, which is, I think, well understood. But just more longer term, how are you thinking about the dividend? Do you have a kind of an estimate when you can restart paying a dividend? And do you have an idea about, in terms of payout ratio, what kind of it would be a sustainable number, kind of going forward, once we are through this COVID-19 pandemic?
I think there's a lot of elements that come into play, because obviously, I've said before that we don't necessarily want to borrow to pay the dividends and the replacement CapEx. I think the decision will be made in January, February of next year, once we have a better sense of the impact for 2020 of COVID. And then the most important thing also is what does the five-year business plan say? And what are we seeing with respect to leverage? So there's a couple of elements that will come into play. I'd love to be more specific, Sander, but I simply at this point we are not, we're not able to tell you.
Okay, totally understood. Thanks very much.
Thank you. The next question comes from Markus Kulessa from Bank of America. Please go ahead.
Yes, hello. I just wanted to come back quickly on the rent collection. So just to be sure I understand well, the 50% July collection is on the total, which would normally be due on July. So it's not 50% of rent, which has not been deferred already?
Correct. It's just July rents. July rents.
Okay. Then a second question. I don't know if I understood right or if I missed something. At the beginning, I heard you say for the €2 billion of disposals, which you negotiated well at the beginning of the year, did you provide a rent guarantee?
We had a EUR 45 million rental guarantee for the assets that were disposed of, and that's a total amount, right, over the full period of the business plan that was underwritten by the investors.
Okay. So nothing changed versus what you said before? Okay. Then on the, yeah, [inaudible] man, thank you very much. Also, on the LTV slide and the headroom, I just wanted to ask you, because maybe it was just next step, what would be the valuation decline before you would breach your LTV covenant? So after the 25%, is it 30, 35, 37, just roughly?
It's a little bit more than 30%. You can see on the slide. You can see the actual numbers and then the quote, unquote, "headroom," so you extrapolate from there, so I think, and Sam can correct me, but if I recall correctly, it's a little bit more than 30% for the entire portfolio, 36% for the retail portfolio.
Okay. Then more of a personal interest, if you, I don't know if you did an EPRA NAV calculation, with past way, how we used to calculate it for June 2020, just so this number of personal interest to compare.
Sure. I can. I have it. I have it. I just need to dig it up here for a second. But we have, we've obviously done that, we've done that analysis. And the EPRA NAV, had we calculated it, would have been EUR 182.90.
$0.90. Okay. Thank you very much.
Thank you. The next question comes from Rob Virdee from Green Street Advisors. Please go ahead, sir.
Good evening, gentlemen. Hope you can hear me. Question on your rent negotiations, generally, but also specifically with regard to U.S. So generally, I note you said the two principles of fairness and sharing the pains, but I think I also heard you say you are not giving any variable leases or variable rent leases. Is that the case? And can you just discuss around that a little bit, please?
Yeah, that's, that's correct. I mean, we are negotiating rent relief for corresponding to part of the closing period, but we are not switching to variable rents only. All our rents, or most of our rents in the U.S. and close to all our rents in continental Europe have got a variable component to them, a structural variable component, so that's come, comes into play or not. But we're not switching from fixed rents to variable rents. This we're not doing. I've heard, I've read articles on this, but this is not what we're doing. So we're negotiating rent reliefs, but not switching like some retailers would like to full variable rents until the end of the year, for instance. We're not doing that.
Okay. That's, that's very clear. And then secondly, with regard to co-tenancy clauses in the U.S., I did note you said that some of the concessions you are giving were on co-tenancy. So the question is, how many of your leases in the U.S., broadly, have these co-tenancy clauses, and how many are being renegotiated out at the moment, broadly?
I'll have to come back to you on that one. I can't give you that off the top of my head. They're usually for main anchors, not for all retailers, obviously, so they're for main anchors, and I'll have to come back to you, so we are negotiating on a case-by-case basis, obviously. What we gave as examples of concessions we're requiring from tenants against rent relief is a set of things which we have at our disposal, so it doesn't mean everybody does everything, but that's what the teams are negotiating with several with the tenants, basically, but we will need to come back to you on that. I don't know if it's... I mean, I don't have the figure off the top of my head. Jaap, I don't know if you do- Somewhere in your office. Okay. Thank you.
Thank you.
Thank you. The next question comes from Rob Jones, from Exane BNP Paribas. Please go ahead.
Hi, yeah, thanks very much. Yeah, so Rob Jones at Exane. A couple, if I may. Just firstly, you mentioned obviously that you said that 25% of negotiations with tenants have been completed so far. Can you give us a bit of an idea in terms of when you expect to complete, say, the majority of those discussions and, you know, for argument's sake, let's say 90% of those discussions. Is by the end of H2 a realistic assumption? Secondly, in relation to that, just so I understand it from an accounting perspective around doubtful debtors versus other provisioning.
If you have a discussion with a tenant, and they say, "We're simply not gonna pay our rent for Q3 or Q2," for example, if you then say to that tenant, "We will instead defer your rent for, say, 12 or 24 months," does that then mean that you don't have to create a provision against that, rents that would otherwise have not been paid? And then my final question really is around disposals and LTV. And the question is, obviously, we haven't seen a material increase in, disposals targets by yourselves, for this H1 reporting period, despite the fact that, obviously, your LTV has now ticked over 40%. Given that, I guess, the market is expecting, still a material increase in LTV from the current levels, what gives you the confidence to not increase your disposals targets?
And playing into that, does that mean that currently you don't think you will need to raise equity in the future?
I need to take question one and maybe three, and you go to question two. Question one: When do we expect the negotiations to be over? You mentioned the end of H2. I hope it's gonna be before the end of H2, because they do take some time. But I hope we'll have a majority of them by the end of September, i.e., by Q3. Some might linger on to Q4, but I hope we can have the majority of them by Q3. There will obviously be the odd negotiation that lingers on, and there will be examples where we don't agree, and if we don't agree, then we'll see what we do. You've probably heard that some...
I do hope and I do trust, because this is the spirit and in which we are running the negotiations, that we'll come to a fair and satisfactory conclusion for both parties in most cases. I'm pretty confident on that. Then we'll see. I can't anticipate. You need to be two to negotiate, obviously. Regarding the disposals, I think we can only say that our track record has been pretty good. You remember we announced EUR 3 billion of disposals in December 2017, when we announced the deal with Westfield, then we increased it to EUR 6 billion by January 2019, then we increased it by EUR 2.5 billion by January 2020.
Today, probably have not noticed, but we increased it by a further EUR 300 million, because if you're, if you follow my calculations, we've already executed EUR 4.8 billion, and we said EUR 4 billion remaining, so that's EUR 8.8 billion in total. We have, I think Jaap mentioned it, we have some negotiations, some pretty well-advanced negotiations on over a quarter of this. As Jaap says, as well, only half is retail. And so we are pretty confident that we can reach this target. And obviously, to reach a target, you need to have a broader base. So the base on which we will be negotiating, and we are negotiating, is above the EUR 4 billion, obviously, in order to be more comfortable on our conviction to reaching the EUR 4 billion. Okay? I hope that answers your question.
The main favorite option is to execute the disposals exactly as we've done in the past. And, of course, to reduce CapEx, you know, EUR 1.6 billion of reduction of the pipeline, following another reduction in half two last year, and deferral of non-essential CapEx. What we don't control in the LTV is the V, obviously. Market seems to indicate that there will be further reductions in values in the second half. I cannot anticipate what I think when Jaap gave you the explanations on how these valuations were made. We will see what happens, but disposals is on the top of our desk, of each and everyone's desk in the company. Jaap, do you want to take question number two?
Sure. With respect to doubtful debtors and what we do if a tenant says, "We're not gonna pay," and as a result of the negotiations, we then defer, right? So that wouldn't hit the, quote, unquote, "doubtful debtors." I think that's what Rob is requesting, correct? So to answer the question, this is perhaps on the downside of reporting only twice a year. But the key here is that if a tenant has not paid for more than 90 days, we take a 50% doubtful debtor provision. 180 days, it gets fully provided for. In the negotiations with the tenants, and as long as this negotiation's ongoing, what the tenants say is ultimately less important than what the ultimate agreement is.
I can tell you that we're all very much interested in getting this behind us, both from a negotiation perspective, as well as maximizing the cash that we're gonna be able to obtain from the tenant. And so we hope it's gonna be limited to, the most of the impact can be done in 2020 . As I said earlier, under IFRS rules, we will have to straight line some of it, and we'll endeavor to give you the delta between the accounting impact and the cash impact, as we've done during the half. So Rob, I can't tell you just what will be in doubtful debtors at the time.
It is not our objective to grow, if you will, the or reduce doubtful debtors by just spreading out the tenant payments for as long as possible to minimize the impact on the balance sheet. In the end, it's about cash collection, present value of money, so I, you know, we will basically try to do this as straightforwardly as we possibly can, consistent with the commercial objectives in terms of making sure that we don't create issues for ourselves, and that we have a fair and balanced, if you will, negotiation with the tenants.
... Okay, great. And then just one quick final one on footfall. I see you say 80%-90%. Should I assume that the average is 85%, or is 80%-90% within that range, is the average across the portfolio closer to 80%?
It's very important. It's across the portfolio of centers that have been reopened since before the beginning of June, and most of them have been open at the beginning of May, because other centers are in the second part, which is the part regarding centers that reopened at the ultimate part of May, and that's the large Parisian surrounding centers surrounding Paris, for instance, as well as the Spanish centers. Now, you saw that the Spanish centers were affected in the last two weeks, given the weight of Barcelona in our portfolio and the decision by the Catalan government to close down cinemas again, as well as leisure operators, sports club, and so on.
Now, just to illustrate how fast things go, I just received a text message during my presentation that the court, the Supreme Court of Catalonia had overruled the decision by the Catalan government, so immediate, with immediate effect. So the cinemas, the sports, the restaurants, and so on, will all reopen as from tomorrow morning or tonight. So this is, you know, an illustration of how unstable the world is. But in this case, it's a good news, and it happened during Jaap's presentation. Actually, I was comfortably sitting while Jaap was speaking, sorry. And so the, I think what is very interesting is to see that the recovery is gradual, and you see the curves going up.
Of course, they're less gradual, and they're, again, in all transparency, I think I explained that the four larger centers in terms of footfall, the two Westfield London and Stratford City ones, and the two very large Westfield centers in Paris, La Défense and the Forum des Halles, are slower to recover, and they are more in the kind of between -30% and -50%, actually rather -55% for the two London centers. And this is linked to the fact that, I don't know where you're based. I'm sorry, I didn't get your name, the line is not very good.
But I guess a lot of people listening to us now in London have not really been back to the office, or at least if they've gone back to the office, probably felt a bit lonely. It's a fact that the traffic on the Paris or the London Metro or Tube system is not back to full speed yet. I anticipate that when schools resume in September and everybody is, you know. I think it's from July thirtieth, i.e., tomorrow, that's in London, the norm now is to go back to the office rather than stay home. I do hope that this will have a positive impact on footfall.
We do rely on public transport, and we do rely, when you have a shopping center in the middle of a business district, on people working in that business district. However, there again, it's evolving every day. But the good news is, the ones that have reopened for long and do not 100% rely on the Tube or the Metro are in this 85%, say, of traffic. So it's pretty encouraging. During the lockdown, everybody thought that it would be minus 50% for long, okay? And the good news is, it's not. People are back in stores.
Thanks, Christophe. It was Rob Jones from Exane in London. Good luck for Unibail.
Okay. Thanks, Rob. I hadn't understood your name. Sorry. Thanks.
Thank you. The next question comes from Michael Mizrahi from Rochdale Capital. Please go ahead.
Yeah, hi. I have a question. During the AGM call that took place just over two months ago, you very clearly ruled out the potential equity raise as an option to delever your balance sheet. You know, given the nice segment that you described today versus your confidence on your LTV, are you willing to also clearly reiterate that statement today? Thank you.
Yeah, thanks for the question. Now, as always, I would say, I mean, as I said, the deleveraging is our priority, and this is what we're focusing on. As always, every option is always on the table, but today, deleveraging through asset disposals is our priority.
All right. Thank you.
Thank you.
Ladies and gentlemen, if you wish to ask a question, please press zero-one on your telephone keypad. The next question comes from David Tomic from VEB. Please go ahead.
Yes, good afternoon. This is David Tomic from European Investors/VEB. A couple of questions. First of all, could you give us possibly a little more feel on how rent collection in Q2, as well as in July, developed as compared to your forecast, most recent forecast? Second question would then be, what gives you the comfort that 50% collection that you achieved for July will improve significantly over the coming months? Third question is on your tax status, your real estate investment trust regime. So could Unibail retain more future income without losing this tax status? And one of the questions as well would be then, are there, at the moment, any discussions with the relevant authorities about temporary waivers with respect to this regime or any other developments whatsoever? Those were the three questions.
... So on rent collection, I mean, very quickly, I mean, the levels for July, June and July are not the levels we were expected, we were expecting. I mean, they are below what we were expecting, and they're linked as, I think I explained, and Jaap further explained in his presentation, to the fact that, first of all, tenants were closed for most of April and May. They had paid, actually, you know, when the lockdown was on sixteenth of March in most countries in Europe, and they had paid the month of March fully.
So they had because that was paid in advance, and, you know, when it's paid quarterly in advance, it was paid in January, and this is why the rent collection of the Q1 is 94%, which is slightly, but just slightly below usual figures. So basically, what's happening is that when we conclude negotiations, the rents start coming in. And one of the difficulties, I mean, our position obviously is the fact that in most cases we deferred April and May, so that's already a lot of deferral. But obviously, when the stores were closed until the fifteenth of May or the thirtieth of May, the retailers need more air to breathe before they can then pay us.
Homeworking is not helping, and but, you know, the collection rate for June has improved since the end of June, and the collection rate of July is improving every day. And as I mentioned, we do not grant any rent relief, i.e., we do not conclude the negotiations until we get payment for June and July or for any arrears that we have. And this is very important, and as I said, this is very well understood. So it's a question of sitting down, finding a deal, and getting paid. It's not as easy as that. It takes some time. Sometimes it takes two, three, four meetings. Sometimes it takes me. Very often it takes Michel Dessolain or Jean-Marie Tritant, but this is the way to do it. Regarding the other questions, Jaap?
Sure. With respect to the REIT status, it's important to keep in mind that we have we are not a REIT in all of the countries in which we actually operate, so that gives a fair bit of flexibility already in terms of what we what we are legally required to distribute. It's a function of the the income of the statutory accounts of Unibail-Rodamco-Westfield SE. All of that gets impacted by valuation movements, it gets impacted by by goodwill, it gets impacted by the actual the actual rents coming in. I don't think there's been currently any discussions. I know there's no been no discussions about waiving any of the requirements with respect to dividends. But I don't think it's a big concern as far as we're we're concerned.
Ladies and gentlemen, if you have a question, please press zero one on your telephone keypad. I repeat, if you wish to ask a question, please press zero one on your telephone keypad. Ladies and gentlemen, since there is no question, this concludes the conference call. Thank you all for the participation. You may now disconnect.