Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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58 S C T / A p r i l 2 0 1 5 Scott Harris, president of Global Know- Who, a New Jersey–based retail real es- tate consulting firm that specializes in Asia and Latin America. "They may have more insight into the demographic and psychographic realities of neighboring countries and are experienced in part- nering with retailers who are transition- ing from street-front stores into modern retail formats." Chileís developers and retailers were pioneers of cross-border expan- sion. A bet on Latin Americaís steady economic growth, familiarity with its consumers and an appetite for the high growth rates of relatively virgin markets led them to build malls in Argentina, Colombia and Peru. Such companies as Cencosud, Mall Plaza and Parque Arauco are world-class organizations ex- pert in development, financing, leasing, marketing and operations, says Harris. "Given the relatively small size of their home market, it is natural that they look to grow beyond Chile," he said. Mall Plaza and Parque Arauco have opened malls in Colombia and Peru, while Cencosud has malls in those two countries plus Argentina and Chile, as well as retail operations in several countries. Other Chilean mall investments in Peru include the Open Plaza mall chain (a subsidiary of Falabella Perú) and Limaís Jockey Plaza, which is owned by Chileís Grupo Altas Cumbres. The driving force has been the growth of Latin Americaís influential middle class, always "attentive to having world-class retail proposals," said Cristián Somarriva, Mall Plazaís corporate development manager. Mall Plazaís first across-the-border invest- ment took place in 2007 at the opening of Peruís Mall Aventura Plaza, in the city of Trujillo. Today the firm has 13 malls in Chile and seven more across Colombia and Peru. Over the next three years, the firm, whose majority shareholder is Grupo Falabella, will in- augurate seven shopping centers: three in Chile and two each in Colombia and Peru. "Colombia is a major step for our growth strategy," said Somar- riva. "It is a very attractive market be- cause of its large size and the opportu- nities for our industryís development." With six malls, three outlet centers and 11 strip centers in Chile, Parque Ar- auco has also been stoking its regional expansion. The firm has three Colom- bia malls ó two existing and the third under construction, plus stakes in 14 Peru centers. The firm says it has plans to open strip centers in both Chile and Peru over the next three years. Grupo Roble, real estate develop- ment arm of El Salvadorís Grupo Poma conglomerate, is among Latin Americaís trailblazers, with 19 properties across Central America. The success of its first mall, Metrocentro, which opened in El Salvador in 1971, convinced the company that its business model could be replicated elsewhere, according to Alberto Poma, Grupo Robleís execu- tive director. In 1976 the firm opened its first mall outside El Salvador: Multi- centro Managua, in Nicaragua. In 1993 Grupo Roble branched into Costa Rica with Multiplaza Escazú, part of a mixed- use project in San José that includes a hotel and office buildings. Further, the firm has expanded to Panama with Multiplaza Pacific and Metromall and also has three malls in Honduras and one in Guatemala. At present the company is in Colombia, constructing the 650,000-square-meter Centro Comercial Multiplaza La Felici- dad, in Chía, a fast-growing city 10 kilo- meters north of Bogotá. "With over 50 years of experience and our mixed-used developments, we have contributed to modernize the urban physiognomy of each of the cities we are in," said Poma. The regional expansion has paid off for Grupo Roble, which says its malls in Costa Rica and Panama are reporting higher revenue growth than its Salva- doran shopping centers. Two other operators from Central America ó Spectrum, of Guatemala, and Corporación Lady Lee, of Hondu- ras ó are similarly active outside their home countries. Spectrum, which al- ready has three malls in Guatemala (plus a fourth under way, in the mu- nicipality of Mixco), also owns the Cas- cadas Mall, in Tegucigalpa, Honduras, now undergoing a major remodeling. "We are continually evaluating new op- portunities, monitoring different Latin American markets," said Ramiro Alfaro, Spectrumís general manager. For Corporación Lady Lee, owner of 14 shopping centers in Hondu- ras, Costa Ricaís City Mall Alajuela marks its debut in that country. The 350-store mall, set to open this Oc- tober, will be the countryís biggest. Among the tenants are Honduran re- tailers looking to enter new markets, such as Farmacias Kielsa and Espresso Americano. "Costa Rica represents a very attractive market for a high-level project like City Mall," said Corpo- ración Lady Lee spokesman Felix Ri- vera. "We feel optimistic, backed by a country of recognized stability that of- fers attractive investment conditions." The decision to go across frontiers is not always driven by tapped-out home markets, some point out. Venezuelan "With the common language and similar cultural heritage, it makes sense for Latin American mall developers to look for opportunities across the region."