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Simon Property (SPG) Poised for Growth on Strong Pipeline
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Simon Property Group Inc. (SPG - Free Report) seems well poised to capitalize on any improving trend in the retail real estate market going forward, given its impressive redevelopment and expansion pipeline. The company had redevelopment and expansion projects in progress at 33 properties across the U.S. and Europe, with its share of the costs being around $2 billion at the end of first-quarter 2016.
Simon Property, which is gathering with the rest of the industry in Las Vegas for RECon Global Retail Real Estate Convention of this year, revealed that all three types of its domestic property types – regional malls, The Mills, and Premium Outlets – are growing. The company, in fact, gave the status of its development efforts in these categories in an elaborative manner.
Speaking of the regional mall category, the company said that transformational expansions, selective new developments and acquisitions are helping in its progress. Last month, Simon Property acquired the luxury retail property – The Shops at Crystals – in the center of the Las Vegas Strip.
In a joint venture with Swire Properties and Whitman Family Development, the company is slated to deliver the 500,000 square feet retail component of Brickell City Centre in downtown Miami. Also a multi-year transformation has started recently for Simon's iconic Copley Place in the center of Boston's Back Bay. Substantial redevelopment activities are also taking place in the company’s most productive assets.
In The Mills category, Sawgrass Mills, the flagship property, continues to expand. And in the west coast, The Mills platform is also enhancing. Bloomingdale's Outlet store is coming to The Outlets at Orange in the Los Angeles area. Further, new development and renovation efforts are helping Simon’s Premium Outlets portfolio to grow. The company also noted that it is adding restaurants and anchors across all three platforms.
We believe that Simon Property’s diversified exposure to retail assets in the U.S. and abroad, efforts to support omni-channel retailing, portfolio-restructuring initiatives and a healthy balance sheet augur well for growth. But stiff competition and any hike in interest rate pose challenges.
Simon Property presently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry can consider better-placed stocks like Pennsylvania Real Estate Investment Trust , Retail Opportunity Investments Corp. (ROIC - Free Report) and Urban Edge Properties (UE - Free Report) . Each of these stocks has a Zacks Rank #2 (Buy).
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Simon Property (SPG) Poised for Growth on Strong Pipeline
Simon Property Group Inc. (SPG - Free Report) seems well poised to capitalize on any improving trend in the retail real estate market going forward, given its impressive redevelopment and expansion pipeline. The company had redevelopment and expansion projects in progress at 33 properties across the U.S. and Europe, with its share of the costs being around $2 billion at the end of first-quarter 2016.
Simon Property, which is gathering with the rest of the industry in Las Vegas for RECon Global Retail Real Estate Convention of this year, revealed that all three types of its domestic property types – regional malls, The Mills, and Premium Outlets – are growing. The company, in fact, gave the status of its development efforts in these categories in an elaborative manner.
Speaking of the regional mall category, the company said that transformational expansions, selective new developments and acquisitions are helping in its progress. Last month, Simon Property acquired the luxury retail property – The Shops at Crystals – in the center of the Las Vegas Strip.
In a joint venture with Swire Properties and Whitman Family Development, the company is slated to deliver the 500,000 square feet retail component of Brickell City Centre in downtown Miami. Also a multi-year transformation has started recently for Simon's iconic Copley Place in the center of Boston's Back Bay. Substantial redevelopment activities are also taking place in the company’s most productive assets.
In The Mills category, Sawgrass Mills, the flagship property, continues to expand. And in the west coast, The Mills platform is also enhancing. Bloomingdale's Outlet store is coming to The Outlets at Orange in the Los Angeles area. Further, new development and renovation efforts are helping Simon’s Premium Outlets portfolio to grow. The company also noted that it is adding restaurants and anchors across all three platforms.
We believe that Simon Property’s diversified exposure to retail assets in the U.S. and abroad, efforts to support omni-channel retailing, portfolio-restructuring initiatives and a healthy balance sheet augur well for growth. But stiff competition and any hike in interest rate pose challenges.
Simon Property presently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry can consider better-placed stocks like Pennsylvania Real Estate Investment Trust , Retail Opportunity Investments Corp. (ROIC - Free Report) and Urban Edge Properties (UE - Free Report) . Each of these stocks has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>