With department stores reviving, and new retailers looking for space, Simon is looking to its older, smaller centers as well as new growth for expansion.
"One of the priorities we have this year is to learn how effective we are in midmarket malls," said David Simon, CEO. "I'm very bullish on them."
Simon admitted that some of the company's projects in smaller markets might be slightly too large. But the major expansion planned by some retailers, including Hollister's plan for 800 stores will help lease these properties, added Rick Sokolov, president.
The company also continues to pursue new development. The first portion of the company's "asset intensification" program will open this year, with the addition of residential space at the company's Village at Southpark center in Charlotte, N.C., In addition, The Domain and Coconut Point mixed-use complexes will open this year in Austin, Texas and Estero/Bonita Springs, Fla., respectively. Philadelphia Premium Outlets, by Simon's Chelsea Property Group, will open in November. Projects in Noblesville, Ind., and Panama City, Fla., are expected to open in 2008.
Internationally, the company is under construction on shopping centers in Argine, Cinisello, Nola and Porta di Roma, Italy, which are fully or partially owned by GCI, the Simon's Italian joint venture. Argine is scheduled to open in 2008, with the rest opening this year.
In Asia, the company (through joint ventures) will open outlet center projects in Seoul, South Korea, and Kobe, Japan, this year. Centers in Changshu, Hangzhou, Suzhou and Zhengshou, China, will open in 2008. All of these centers will be anchored by Wal-Mart, and are joint ventures with Morgan Stanley Real Estate Trust and Shenzhen International Trust and Investment Company CP.
Simon's joint venture with Canadian developer Ivanhoe Cambridge could lead to yet another new market, Simon said.
"We continue to evaluate Russia," he said. "We may have a development there that Simon Ivanhoe may do."
Funds from operations (FFO) for the quarter came to $450.4 million, up 7.5% from the previous year. Net increased 76.9% to $204.7 million.
For the year period, FFO increased 8.9% from 2005 to $1.537 billion. Net income increased 21.0% to $486.1 million.
Meanwhile, Simon is bidding , with investment firm Farallon Capital Management, with investment firm Farallon Capital Management, $24 per share for the Mills Corp. The offer is an increase from a $21-per-share bid made by Brookfield Asset Management last month.
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