(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)
INDIANAPOLIS-Simon Property Group has $6.9 billion worth of developments and redevelopments in its pipeline that are scheduled to be completed between next year and 2010. Simon's share of the total cost comes to $4.7 billion, while partners of the company will pay for the remainder.
Most of those costs will go toward mall redevelopments, totaling $1.6 billion. On the new development front, the biggest chunk of expense, $700 million, goes toward the construction of open-air lifestyle centers. Meanwhile, as the firm increasingly adds non-retail uses to its malls, $650 million of future projects are residential, office, hotel and other components to centers.
This year the company is on track to open three developments, the 1.2-million-sf Coconut Point, an open-air center in Estero, FL; and two outlet centers, the 433,000-sf Round Rock Premium Outlets in Texas and the 404,000-sf Rio Grande Valley Premium Outlets, in Mercedes, TX. Two more centers, both open air, are slated to open next year so far.
During the company's second quarter, which ended June 30, retailer vacancies due to bankruptcies spiked to 380,000 sf from 250,000 sf for the first six months of the fiscal year. Two-thirds of that space was vacated by Musicland, 200,000 sf of which executives say has already been spoken for by retailers such as Coach and Pacific Sunwear. Additionally, previously announced Casual Corner closures, which left 340,000 sf empty, are getting filled up, management says.
Sales per sf in the company's 171 regional malls jumped to $468 during the quarter, up from $442 during the same year-ago period. At its 34 US premium outlet centers, sales per-sf increased from $426 to $453. Sales were flat at its 70 community centers and increased slightly at the 57 centers the firm operates in Europe and Japan.
Simon's FFO increased 6.9%, to $358.4 million, during the quarter. Net income fell 46.4%, to $82.9 million, compared to last year's Q2, which was highlighted by the one-time of office buildings.
Occupancy rates decreased in the company's malls by 60 basis points, to 91.6% and by 120 basis points in community and lifestyle centers, falling to 89.7%. Outlet centers saw a 20-basis-point-jump, to 99.4%.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
