REAL ESTATE

Outlet centers helping REITs to thrive

BY Michael Fickes

New York — Since 2009, retail sales at North America’s 205 outlet centers have increased from $19.9 billion to $27.6 billion, an increase of $7.7 billion, according to an International Council of Shopping Centers report.

Six publicly traded REITs with notable outlet center portfolios have benefited from outlet center success, according to SNL Financial. They are:

  • Tanger Factory Outlet Centers Inc.
  • Simon Property Group Inc.
  • Taubman Centers Inc.
  • CBL & Associates Properties Inc.
  • Glimcher Realty Trust
  • Macerich Co.

With more than 12 million sq. ft. of owned outlet centers in the U.S. as of Nov. 15, Tanger is the only REIT focused solely on investing in the sector. Tanger has reported a portfolio occupancy rate of 98.7%, the highest among the six U.S. REITs focused on outlet centers. All of Tanger’s assets, 40 properties in the United States and Canada, delivered 4% same-store NOI growth in a recent reporting period. The company currently counts seven outlets in its development pipeline.

Analysts from KeyBanc Capital Markets don’t expect the outlet centers’ outperformance to carry over into a rising stock performance. In a November 3, 2013 report, KeyBanc acknowledged that outlet center REIT shares have outperformed malls since the beginning of the quarter but said that was the result of a lackluster mall environment.

“We suspect investors have perceived SKT (Tanger) as a ‘safety trade.’ However, longer term, we expect the stock to underperform its mall and shopping center REIT peers,” said the report, mentioning that leasing spreads are likely to decrease due to flattened sales growth and a softened retail climate.

The analysts also expect Tanger’s acquisition opportunities to remain sparse and for yields on new developments to fall “at (or below) the low end of the company’s forecasts,” given competition surrounding new projects.

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VitaminFizz acquired by Level 5 Beverage Co.

BY CSA STAFF

Minerco Resources announced that Level 5 Beverage Co. has acquired VitaminFizz, a low-calorie, vitamin-enriched soda that was developed by Power Brands Consulting. VitaminFizz was extensively tested in the market in 2011, but the launch was delayed while efforts were focused on other consumer brands.

“In the ever-expanding beverage industry, it is important to align yourself with the right partners. It has taken longer than anticipated, but we were not ready to settle for second-best. Level 5 is the perfect complement to an amazing team of beverage industry champions and a world-class brand," said Darin Ezra, CEO of Power Brands.

VitaminFizz is being re-vitalized by Power Brands in a new 16-oz. plastic bottle and will be re-introduced into the market in the near future.

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Stores remain popular on Black Friday according to survey

BY CSA STAFF

Despite the growing popularity of online shopping, millions of consumers will flock to the stores this Black Friday. According to a recent study from WD Partners, "Amazon Can’t Do That: Consumer Desire & the Store of the Future,” 79% of consumers rank instant ownership as a top factor in influencing how they shop.

Other store-friendly top influencers include sensory experience and product immersion (75%), emotional experience of interacting with live human beings, community, and personal service.

"The store should be a place of inspiration and ideas that leaves shoppers with a high or sense of euphoria. The in-store shopping experience must offer more than a warehouse does," said Lee Paterson, EVP of creative services of WD Partners. "Retailers who provide this type of shopping experience will be successful this holiday shopping season."

The study is based on quantitative and qualitative shopper research by WD Partners. In May 2013, more than 1,700 consumers were surveyed using a nationally syndicated panel.

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