In compliance with the strategy of increasing its footprint in
the international arena,
Simon Property Group Inc.
) recently penned a joint venture (JV) deal with McArthurGlen
Group, a leading European Designer outlets operator.
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Simon Property will make an initial investment of €435 million
($569 million) and as per the deal terms, the company will gain
ownership of six properties and become a partner in
McArthurGlen's property management and development company. The
investments will comprise properties in Austria, Italy, the
Netherlands, the United Kingdom and Canada.
The deal is a strategic fit for the retail real estate investment
trust (REIT) - Simon Property - which can leverage on
McArthurGlen's high-quality retail real estate assets in Europe.
Also, with Simon Property being a leading operator of malls and
premium outlets in the U.S. and Asia, McArthurGlen stands to
benefit from its relationships and expertise.
Notably, Simon Property has assets in almost all retail
distribution channels across the U.S. Furthermore, the company's
international presence gives it more sustainable long-term growth
prospects than its domestically focused peers.
Its ownership stake in Klépierre provides for consolidation of
its global footprint and offers access to high quality retail
assets in the high barrier-to-entry markets of Europe. We believe
that the diversification with respect to product and geography
also largely insulates Simon Property from market volatility and
helps it deliver a decent performance.
Simon Property currently holds a Zacks Rank #3 (Hold). However,
other retail REITs that are performing better and deserve a look
Cedar Realty Trust Inc.
Kimco Realty Corporation
The Macerich Company
), all carrying a Zacks Rank #2 (Buy).