Retail real estate investment trust (REIT),
Kimco Realty Corporation
), continues to scale down its Latin American portfolio.
Recently, the company announced the offloading of a 4-property
Mexican shopping center portfolio through a purchase and sale
deal to its local operating partner, Planigrupo, for $92 million
(1.2 billion Mexican pesos). The move is part of Kimco's efforts
to overhaul its portfolio in order to improve the core business
The wholly-owned assets - La Nogalera in Saltillo, Plaza
Universidad in Pachuca, Gran Plaza in Cancun and Plaza Bella
Huinala in Monterrey - span a total of 1.1 million square feet.
They are occupied by renowned companies such as HEB and
The Home Depot, Inc.
Wal-Mart Stores Inc.
) affiliated Bodega Aurrera and Suburbia. The deal is slated to
close in the fourth quarter of 2013, subject to customary
Kimco is particularly aiming to strengthen its North American
portfolio and reshuffling its joint venture investments to
achieve overall efficiency. In line with this, the company has
been disposing its non-retail assets and investments as well as
non-strategic retail assets to redeploy the capital in its core
In this context, Kimco has been active in disposing its Latin
American portfolio in recent times. In the current quarter, Kimco
sold its 43% stake in a Guadalajara, Mexico-based asset Centro
Sur shopping center, spanning 655,000 square feet, for $41
million (523 million Mexican pesos). Moreover, the company
offloaded its 50% stake in a Chile-based 9-property shopping
center portfolio, spanning 269,000 square feet, to its local
operating partner for $50.2 million (25.3 billion Chilean pesos),
including $33.1 million (16.8 billion Chilean pesos) of debt.
Additionally, during second-quarter 2013, Kimco had vended 9
assets of its Mexican shopping center portfolio (spanning 2.6
million square feet) to a local real estate operator for $274
million (3.35 billion Mexican pesos).
We commend Kimco's efforts to improve its core business line.
Last month, the company also came up with better-than-expected
second-quarter 2013 results benefiting from strong operating
portfolio performance. Kimco also raised the lower end of its
previously issued adjusted funds from operations (FFO) per share
guidance for the second time in the year. However, the
competitive market and short-term headwinds for occupancy in the
midst of an unsettled economic environment remain our
Kimco currently carries a Zacks Rank #3 (Hold). A
better-performing retail REIT that is worth a look is
Cedar Realty Trust, Inc.
), which has a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization
and other non-cash expenses to net income.
CEDAR SHOPN CTR (CDR): Free Stock Analysis
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