Recently, Simon Property Group Inc. (SPG - Analyst Report) in collaboration with Mitsubishi Estate Co., Ltd., announced the opening of its new Premium Outlet Center in Japan – Shisui Premium Outlets. The mall opening is in line with the retail real estate investment trust’s (REIT) ongoing expansion activity to spread in upscale locations across the globe.
Shisui Premium Outlets, which represents Simon Property’s 9th Premium Outlet Center in Japan, is located in the Inba District of Chiba. The property is well-connected to Tokyo through the recently opened Shisui Interchange on the Higashikantou Expressway. The shopping center is also easily accessible to transportation channels of Japan.
The first phase of the Shisui Premium Outlets spans 234,000 square feet and is 100% leased to upscale domestic and international tenants. The center boasts approximately 120 stores, which include some of the prominent American companies such as The Gap, Inc. (GPS - Analyst Report), Coach, Inc. (COH - Analyst Report) and Michael Kors Holdings Limited (KORS - Analyst Report).
We expect the above-mentioned property to boost Simon property’s top-line growth going forward, given the strategic positioning of the Premium Outlets center in the highly productive area of Japan. Moreover, Shisui Premium Outlets will complement Simon Property’s other properties in Japan that are placed in some of the vibrant areas such as Osaka, Nagoya and Fukuoka.
Notably, Simon Property has been active in capitalizing on growth opportunities in top markets worldwide, with special focus on enhancing its Premium Outlets portfolio. Currently, the company has 77 Premium Outlet Centers, which include 63 in U.S and 14 abroad. Simon Property also has some Premium Outlets properties in its development pipeline, which are slated to open by the end of 2013. These include Busan Premium Outlets, St. Louis Premium Outlets and Toronto Premium Outlets.
Simon Property is scheduled to release its first-quarter 2013 results on Apr 26, before the opening bell. The Zacks Consensus Estimate for the company’s first-quarter FFO (funds from operations) is currently pegged at $2.01 per share.
The Zacks earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Simon Property is -0.50% for the first quarter. This, combined with a Zacks Rank #2 (Buy) indicates that the company may not beat the Zacks Consensus Estimate in the first quarter.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.