Report: Malls not dead, far from it

New data from two leading retail industry trade groups show that, once again, the demise of the nation’s malls is greatly exaggerated.

Rents, occupancy and net operating income among the nation’s shopping centers reached record levels last year, according to a review of 2014 data by the International council of Shopping Centers (ICSC) and the National Council of Real Estate Investment Fiduciaries (NCREIF).

“The 2014 data paints a very strong picture of the shopping center industry for the year ahead, and is especially promising in the mall segment,” said ICSC spokesperson Jesse Tron. “Record growth in key indicators such as occupancy and NOI strongly indicate a healthy outlook and further underline the ability of the industry to innovate to fit the needs of today’s consumer.”

Among the key results: Mall occupancy rates were at 94% at the end of 2014, a level not seen since 1987. Occupancy rates for all shopping centers were 93% at the end of fiscal 2014, the highest level since 2008. Also, net operating income at both shopping centers overall and the mall segment saw the highest year-over-year growth in the past 14 years.

Based on U.S. Census Bureau data, the value of shopping center construction, including work done on both new and/or existing structures, reached $14.5 billion in 2014, the highest since 2008. This is an 18.6% increase over 2013, and also the fourth consecutive annual double-digit increase. This strong growth in 2014 is pointing to continue success and a positive outlook for the shopping center industry and malls in 2015. Shopping centers continue to evolve and change with the times.

Some big trends this year include the evolution of the anchor store, where grocery stores and fast fashion might be owning the spots once only dominated by department stores.

The mall has also become an experience center with services and entertainment to entice shoppers –- like the recently announced proposal from the owners of the Mall of America to build the nation’s largest mall, the American Dream Miami project, which would feature an indoor-outdoor amusement park, 520 stores, recreational activities and entertainment.

And once online-only retainers continue to open physical stores at shopping centers and malls to touch, feel and experience their products.