Ian Ritter is national online editor for GlobeSt.com/RETAIL.
INDIANAPOLIS-Simon Property Group will spend $500 million annually on development and redevelopments over the next several years, executives said yesterday during their Q4 conference call. And they're well on their way.
The company currently has six centers under construction: the 785,000-sf Firewheel Town Center in Garland, TX; the 250,000-sf Rockaway (NJ) Plaza; the 1.5-million-sf St. John's Town Center in Jacksonville, FL; the 385,000-sf Seattle Premium Outlets in Tulalip, WA; the 1.2-million-sf Town Center at Coconut Point in Estero, FL; and the 670,000-sf Wolf Ranch, just north of Austin, TX. Among the centers the company could break ground on this year include projects in Austin and Fort Worth, TX; Panama City, FL; and Tinton Falls, NJ. Internationally, the company has one center under development in Japan, three in Italy and is looking to build more in those countries as well as in France, Germany, Poland and South Korea.
"Our development pipeline is as full as it's ever been," said Richard Sokolov, Simon's president and COO. During its fourth quarter, Simon completed three projects: the construction of the 579,000-sf Clay Terrace in Indianapolis; the 1.1-million-sf Arkadia in Warsaw, Poland; and a 175,000-sf expansion of the Forum Shops at Caesars in Las Vegas.
Speaking about published reports on a possible acquisition of the May Department Stores by Federated Department Stores, Sokolov said the company has 27 malls with stores from both chains, but those malls have average per-sf sales of $500, more than the industry average of $345. "If we control the real estate, we are confident that we can find quality replacements," he said, on the presumption that the merged chains would close stores. (For their part, May officials did not address the rumored acquisition during their quarterly conference call yesterday.)
During its Q4, the company's FFO was $397.6 million, an increase of 18.8% from the same year-ago period. The average sales per-sf at its malls was $427 as of Dec. 31, an increase from $402 during the same time a year ago. Simon owns 296 centers in the United States and Puerto Rico, 51 in Europe and four in Japan.
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