Simon Property Group Inc. (NYSE:SPG) disclosed the launch of a significant expansion for the premier shopping destination – Allen Premium Outlets – in North Texas. The move comes as part of the company’s efforts to drive more footfall by enhancing shopping experience at the center.
As part of this effort, around 30 new specialty retailers will likely be added to the center. Renovation with new features such as WiFi service and updated seating is also in the cards. The expansion is slated to be completed by fall 2017.
Apart from these, rezoning has already taken place for a 22-acre plot to the northeast of the present shopping center. This space would not only include restaurants and hotels in the future, but will also accommodate around 1,300 parking spaces.
Notably, Allen Premium Outlets, which is already a well-known destination for the greater Dallas/Ft Worth metroplex's residents and visitors, has a solid tenant roster including well-known designer and sportswear retailers. These are Michael Kors (NYSE:KORS) , Nike Factory Store (NYSE:NKE) and Polo Ralph Lauren Factory Store (NYSE:RL) to name a few.
In fact, Simon Property 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 recently unveiled the groundwork on Norfolk Premium Outlets, located in Norfolk, VA. This marks the most significant retail development in the area in nearly two decades.
At the end of first-quarter 2016, Simon Property had an encouraging pipeline with redevelopment and expansion projects in progress at 33 properties across the U.S. and Europe. Its share of the costs was around $2 billion. In a May press release, the company 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.
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 as challenges.
Simon Property presently has a Zacks Rank #3 (Hold).
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