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Macerich, Taubman Assets to Serve as Micro Distribution Hubs

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As the retail real estate market continues to evolve and focus on supporting multi-channel retailing becomes essential, some retail properties of Macerich (MAC - Free Report) , Taubman Centers (TCO - Free Report) and Brookfield Properties have been selected, where the logistics-as-a-service platform for retail — Fillogic — plans to open tech-enabled micro distribution hubs.

The five major retail properties selected so far include four in New Jersey and one in Connecticut. Among these are Deptford Mall of Macerich, Paramus Park of Brookfield Properties, Stamford Town Center of Taubman, and two other regional properties. These will be the first locations for Fillogic Hubs to open by Jul 1. Further, Fillogic has intentions to add scale with 10 key mall sites in the tri-state area set to be open by the end of 2020.

Notably, mall traffic continues to suffer and retailers unable to cope with competition are filing bankruptcies. This has raised concerns over the fate of cash flows of physical stores and landlords as the trend is considerably curtailing demand for the retail real estate space. This has affected Macerich, Taubman, while the likes of Simon Property (SPG - Free Report) , Kimco (KIM - Free Report) and others have not been immune too.

Also, there is likely to be no respite in the near term as the tepid environment will likely prevail with dwindling footfall at retail properties amid social-distancing mandates and higher e-commerce adoption due to the coronavirus pandemic.

However, the situation has also opened up scope for mall-based distribution hubs. Fillogic is aimed at helping retailers improve services, lower costs and make optimum asset utilization with the help of such strategically positioned, mall-based, tech-enabled distribution hubs. More than 60% of mall-based retailers presently have ship-from-store capability and malls are shipping on 950-3,200 packages, on an average daily. As such, these mall-based distribution centers, situated close to the customers of the retailers, help in faster delivery of products.

Furthermore, the coronavirus pandemic has made local grocery, pharmacy and essential physical brick and mortar retail all the more important. Amid these, apart from the fast adoption of the e-commerce platform, curbside pick-up, combined with click and collect options, are likely to gain attention.

In case of curbside pick-ups, customers are allowed to place the orders online or over phones. They later drive to the locations and the items are delivered to their car trunks or kept outside for pick up. This is viewed as a modification to the “order online, pick up in-store” that retailers were practicing earlier. Such efforts are likely to provide competitive advantage to the retailers as well as the retail landlords.

Currently, both Macerich and Taubman Centers carry a Zacks Rank #3 (Hold). Over the past year, shares of Macerich and Taubman have declined 72.6% and 7.4%, respectively, compared with the industry’s decline of 22.1%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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