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08/02/2022

Report: Mall giant sees no downturn in store openings

Marianne Wilson
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Inflation worries aren’t stopping retailers from opening new stores.

Simon Property Group, the nation’s largest mall owner, said the pipeline of new businesses slated to open up at its properties remains strong.

“Even with what’s going on in the world, we really haven’t seen anyone back out of deals of note at all,” David Simon, chairman, president and CEO, Simon Property,  said on an earnings conference call Monday. He added that the company was seeing a big rebound in Las Vegas and that Florida “is on fire.”

Simon also said while higher-income consumers are still spending money, younger shoppers and those who shop at value-oriented retailers are reining in their spending.

In its second quarter earnings report, the mall giant said that its occupancy rate was 93.9% at June 30, 2022, compared to 91.8% on June 30, 2021. Its average base rent increased for the third consecutive quarter, to $54.58. It had record second-quarter sales of $746 per square foot at its malls and outlets combined.

“Leasing momentum accelerated across our portfolio,” Simon said on the call. “We signed nearly 1,300 leases for more than 4 million square feet in the quarter, and have signed over 2,200 leases for more than 7 million square feet through the first half of the year. And we have a significant number of leases in our pipeline. Nearly 40% of our total leasing activity in the first six months of the year has been new deal volume.”

To date this year, retailers in the U.S. have announced 4,432 store openings, compared with 1,954 closings, according to data from Coresight Research, resulting in a net of 2,478 openings, reported CNBC.