Simon Property Group, Inc.
) recently stated the plan of opening new
) upscale department store chain - Saks Fifth Avenue - immediate
to Saks' existing store at The Galleria, a world-renowned mall in
Houston. Simon Property also disclosed its plan to initiate
renovation work at this shopping center.
Scheduled to open in late 2015, the new two-story Saks Fifth
Avenue store will span around 198,000 square feet. Until the
opening, Saks Fifth Avenue will operate from its existing store.
Upon opening of the new store, the existing outlet of Saks Fifth
Avenue will be refurbished to a new and vivacious two-level mall
wing that will add 35 upscale retailers and several restaurants
in that wing. This wing will also connect the new Saks Fifth
Avenue store and other retail outlets.
As a matter of fact, The Galleria offers 4 department stores
and over 350 other stores that span over 2.2 million square feet
and generate more than $1.25 billion in sales. Owned by Simon
Property's affiliate and Institutional Mall Investors LLC (IMI),
this property is also U.S.'s fourth largest shopping center.
Besides Saks Fifth Avenue, The Galleria boasts the outlets of
other noteworthy retailers such as Neiman Marcus,
Tiffany & Co.
) and Gucci.
To further boost the property's value, Simon Property intends
to renovate the parking area of The Galleria and construct a
multi-tenant building along Westheimer Road for a select group of
luxury retailers. Additionally, Simon Property intends to build a
new 300-unit luxury residential property with all modern
amenities at the corner of West Alabama and Sage that will
provide residents an indoor connection to The Galleria.
We remain upbeat about with the relocation plan of the Saks
Fifth Avenue store and related renovations. Apart from adding one
hundred thousand square feet of luxury retailers, this move is
expected to draw more visitations as well as increase rent and
occupancy at The Galleria. This, in turn, will enhance Simon
Property's profitability going forward.
Simon Property currently carries a Zacks Rank #3 (Hold).
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