The center will be Mills' third outside of the US. Last year it opened Madrid Xanadu a retail-entertainment center outside of the Spanish capital, and the company opened Vaughan Mills, outside of Toronto, with Ivanhoe last month. Mills also plans to build Mercati Generali, an 830,000-sf retail-entertainment center in Rome and company officials said they are looking at other sites in Italy and Spain. In addition to these formally announced projects Mills has been in talks to build a one-million-sf regional mall southeast of Glasgow.
The deal comes as US shopping center owners, such as General Growth Properties, Simon Property Group and Taubman Centers, are buying and building centers abroad. Foreign property owners are currently doing the same in the US. On Sunday, Australia-based Centro Properties Group, with Santa Monica, CA-based Watt Commercial Properties, reached an agreement to acquire US retail REIT Kramont Realty Trust for $610 million. (For the story, click here).
Mills, which will manage St. Enoch, plans to add 50,000 sf of space to the front of the center, as well as expand other parts of the development. Mills and Ivanhoe plan to fund the center's acquisition through a combination of debt and equity.
St. Enoch, which opened in 1989, has two retail components. One is a six-level section anchored by a 270,000-sf Debenhams department store, as well as Gap, HMV, Powerhouse, Top Shop and Virgin. An 81,000-sf BhS department store is the anchor of the other portion, which also counts Burton, the Disney Store and Wallis as tenants.
"This is an unparalleled opportunity to acquire a shopping mall with strong upside potential in a premier location in a premier market," says Laurence C. Siegel, Mills' chairman and CEO. "The acquisition of St. Enoch Centre, along with Madrid Xanadu and our other key developments in the UK, Spain and Italy, provides the Mills with a strong foundation to further build our franchise in select European markets and create maximum shareholder value."
Mills owns 38 centers, including retail-entertainment centers and traditional malls, totaling 38 million sf. Ivanhoe Cambridge, based in Montreal, owns about 50 malls in North America, totaling 39 million sf.
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