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May 23, 2007
No Slowdown for Retail Deals
Mall Industry Just Shrugs Off Consumer Spending Softness;
Convention Goes Green
The Wall St. Journal
By Ryan Chittum
Forest City is bullish on malls, with more in the pipeline:
BUILDING VS. BUYING: For retail companies, the flood of capital that has boosted asset prices to records means development is more attractive than acquisitions. Australia's Westfield Group has more than $6 billion under construction -- half of which is in two mammoth malls in London. In the next two years, the company will break ground on an additional $8 billion of reinvestment. "The internal rates of return on buying assets just aren't good enough versus return on redevelopment," says Westfield Chief Executive Peter S. Lowy.
Forest City Chief Executive Charles A. Ratner agrees. "It's hard for us to see the value today in what these entities and assets are commanding in the marketplace," especially given the premium returns from development, he says. Forest City, as with Westfield and others including Macerich Co., has a robust pipeline, with some four million square feet of retail space opening this year -- a record for the company.
NoLandGrab: The article doesn't mention that Forest City and Westfield are partners in the newly opened San Francisco Center.
Posted by lumi at May 23, 2007 6:25 AM