The Unibail-Rodamco-Westfield (ASX: URW) share price is down almost 30% from this time last year, when URW shares hit the market following the merger between Westfield Corporation and Unibail-Rodamco. URW shares began trading for $14.73 in June of last year, but today shares are going for just $10.41 (at the time of writing). Does this mean URW shares are in the bargain bin? Or is this a falling knife that is best kept far away?
Westfield's coattails
As mentioned above, the company we now know as Unibail-Rodamco-Westfield is a byproduct of two major events that occurred on the S&P/ASX 200 (INDEXASX: XJO) index during the last 5 years. In 2014, the shopping centre empire of Westfield Group, founded by Sir Frank Lowy back in 1960 was demerged. Westfield's Australian and New Zealand assets were spun off into the newly created Scentre Group (ASX: SCG), while Westfield's remaining international assets became housed under Westfield Corporation.
In 2018, Westfield Corporation merged with French shopping giant Unibail-Rodamco to form the company we see today. URW has a dual listing on the ASX as well as the Euronext stock exchange in Europe. Westfield shareholders at the time were given URW shares as part of the merger.
While Westfield used to be one of the biggest ASX success stories ($1,000 invested in Westfield in 1960 would be worth over $400 million today), the future is a lot more uncertain for URW going forward. Online retail has threatened the future of the retail-based shopping malls that were the trademark of Westfield's business model. While Amazon Inc. has yet to have a major impact on the Australian retail marketplace, its effects have been felt more acutely in Europe and the United States, and Australian investors are worried about the writing on the wall.
Is URW a buy?
What's also worrying is that many investors felt that Sir Frank and his family were bailing out for a good reason (perhaps looking at the same wall), taking their profits along the way. Although there are positives to gain with the joining of Unibail-Rodamco and Westfield Corporation's forces to fight future threats together, the threats may just be too big to accurately predict what the future may hold for retail shopping.
Foolish takeaway
Although URW is a global force with a large portfolio of prime real estate, the threats to the future of this company are very real and investors have been right (in my opinion) to be afraid, very afraid. Until I can see some positive trends in the company, I will be staying away from this one.
