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MOVERS AND SHAKERS OF 2004

BY BINDU NAIR

Unlike last year, new entries dot ICSC’s 2004 compilation of the top 50 North American shopping center owners. But like last year, familiar names still abound. Notably, the five largest companies — all REITs — have remained the same. Their combined holdings, however, have increased by nearly 23 percent over last year. Most of the gains were the result of large-scale transactions. Witness:

• Last November Simon Property Group increased its ownership of Kravco Co. (No. 43 last year) to 80 percent. At press time Simon was on track to acquire Chelsea Property Group (No. 36 last year) by year-end.

• General Growth Properties has bought four malls and a specialty center so far this year, totaling 5.3 million square feet. The firm has also opened the nearly 2 million-square-foot Jordan Creek Town Center, and at press time was set to acquire The Rouse Co. (No. 12 last year) by year-end.

• Mid-Atlantic Realty, with 4.7 million square feet of open-air centers, was taken over by Kimco Realty Corp. in October of last year. By the end of this year, a joint venture involving Kimco is slated to acquire Price Legacy Corp., which owns 40 properties totaling 8.7 million square feet.

• In June Developers Diversified Realty Corp. was in possession of 98 open-air centers totaling 17.5 million square feet it had acquired from Benderson Development Co.

• The Inland Real Estate Group of Cos. has been on a buying spree for several years now. In the past year alone its holdings have grown by 23 million square feet — a gain of nearly 37 percent.

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There was a flurry of acquisition activity beyond the top five as well. Among these deals:

• CBL & Associates Properties purchased six malls totaling 5.1 million square feet this year. The firm is also a co-owner of the 1.1 million-square-foot Coastal Grand-Myrtle Beach (S.C.) mall that opened in March.

• Pennsylvania Real Estate Investment Trust was one of the largest chart jumpers of the year, going from No. 34 last year to No. 14 this year. This was achieved primarily through its late-2003 takeover of Crown American Realty Trust (32 last year).

• The Lightstone Group joins the list for the first time at No. 30. The firm took over Prime Retail’s 36 outlet centers in December 2003 to gain an additional 10 million square feet of property. Lightstone also purchased five malls this year, totaling 2.6 million square feet, from PREIT.

• The Mills Corp. plans to acquire a 50 percent stake in the nine malls owned by General Motors Asset Management (No. 45 last year), which total 9.6 million square feet.

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With some notable exceptions, the majority of companies on the list are U.S.-based. The exceptions include Australia’s The Westfield Group and five Canadian companies. Westfield’s North American holdings are in the United States, while almost all the Canadian companies’ portfolios are in Canada. Both Cadillac Fairview and Ivanhoe Cambridge have interests in some U.S. malls and open-air centers, however.

The Australian influence on U.S. retail space, in particular for open-air centers, is on the rise, largely due to partnerships forged with U.S. companies. Developers Diversified, Regency Centers and CBL & Associates, for example, have ventures with Australia-based Macquarie Bank, Macquarie CountryWide Trust and Galileo America Shopping Trust, respectively.

U.S. companies, for their part, have also shown an interest in projects overseas, sometimes through partnership with a local company. (These are not counted in the ranking.) Simon has joined with Italian company Rinascente Group to own centers in Italy. Through its impending acquisition of Chelsea, Simon will also gain access to Japan. Most recently, General Growth acquired centers in Brazil and plans to build one in Costa Rica with local partners. Mills developed the 1.4 million-square-foot Madrid Xanadú in Spain.

Bindu Nair is an analyst for ICSC’s Research Department.