Simon Property Group to Invest $1 Billion to Redevelop Mall Assets
May 23 2017 - 11:27AM
Dow Jones News
By Esther Fung
Shopping mall landlord Simon Property Group plans to invest an
additional $1 billion to redevelop its properties for the modern
retail age.
The Indianapolis-based real-estate investment trust, the largest
shopping mall developer and owner in the world, has been renovating
its malls and mixed-use assets across the U.S. It had spent $5
billion over the past five years on efforts such as interior
enhancements, upgrades to tile, lights and furniture, and
redeveloping former department store locations for other
tenants.
"Our primary focus continues to be investments in our physical
product to enhance our guests' experience," said David Simon,
chairman and chief executive of Simon Property.
Shopping mall owners have been compelled to reinvest in their
portfolios to bring in more restaurants and entertainment tenants
and ensure they remain appealing as consumers' shopping preferences
change. Owners with stronger balance sheets have more resources to
improve their assets, which in turn helps attract retailers and
shoppers.
Green Street Advisors, a real-estate research firm, conducts an
annual review of 1,400 malls, outlets and other retail real estate
that includes updates to estimates on their operating metrics as
well as their grades.
Roughly 200 malls saw changes in grades, of which 85% went down
the spectrum, not up, said Green Street Advisors. Apart from sales,
the firm has given greater consideration to location, tenant mix
and physical appeal this time.
"Discussions with market participants suggest the criteria for
mall quality has become more stringent, which coupled with a
tumultuous retail environment, has caused us to become more rigid
when grading malls," Green Street said.
Write to Esther Fung at esther.fung@wsj.com
(END) Dow Jones Newswires
May 23, 2017 11:12 ET (15:12 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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