Shopping Centers Today

FEB 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

Issue link: https://sct.epubxp.com/i/448937

Contents of this Issue

Navigation

Page 9 of 59

10 S C T / F e b r u a r y 2 0 1 5 T H E C O M M O N A R E A Landlords eager to reclaim JCPenney stores Some landlords are welcoming the closures of underper- forming JCPenney anchor stores at their shopping centers as they anticipate finding more-profitable uses. The Plano, Texas–based department store chain announced plans to close 40 stores by April, representing 4 percent of its total U.S. footprint. CBL & Associates Properties announced future redevelop- ment or replacement plans for Penney anchor locations in its portfolio. "We anticipated these closures by JCPenney and have already made significant progress on our plans to rede- velop with new stores and restaurants that will generate higher traffic and productivity," said Stephen D. Lebovitz, president and CEO, in a press release. Penney will close four stores in the CBL portfolio. It leases three of those from CBL and will continue to pay rent until lease expiration, says Lebovitz. Based on CBL's past anchor redevelopments, such projects have generally required 12 to 24 months to complete and an investment of about $3 million to $10 million, generating initial unleveraged returns in the range of 7 to 10 percent, the firm says. Last year CBL added or redeveloped about two dozen anchor and junior anchor sites to its portfolio, comprising about 600,000 square feet. CBL has three anchor redevelopment projects on tap to begin construction in the coming months. These include redevelopment of a former JCPenney at Janesville (Wis.) Mall into Dick's Sporting Goods and Ulta, and redevelopment of a Penney at Hickory Point, Forsyth, Ill., into a Hobby Lobby. "The closure of un- derperforming anchor stores continues to be one of the best value-creation opportunities we have today," Lebovitz said. Raising flagships Even as some retailers seek smaller stores to maximize profits, several big international chains are open- ing larger and larger flagship stores. Fast-fashion retailers, in particular, are driving the trend, according to Cushman & Wakefield. Spanish conglomerate Inditex is increasing store space requirements for all its brands. Zara recently opened its largest store worldwide, a 53,820-square-foot unit in Madrid, and has plans to expand its Barcelona store to 70,000 square feet within the next two years. Meanwhile, H&M; has bumped its typical flagship prototype up to about 64,000 square feet, to judge by the chain's flagship store in New York City's Herald Square, its largest. According to Cushman & Wakefield, the chain is seeking spaces as large as 18,000 square feet or so in European High Street districts. Spanish chain Mango is beefing up its flagships too. The retailer cur- rently requires a minimum of nearly 19,400 square feet but is planning to open a 43,000-square-foot new store in Madrid. Irish chain Primark is another big grower, with its typical flagship prototype having gone from about 32,000 square feet two years ago to somewhere between 53,000 and 72,000 square feet today. SCT

Articles in this issue

Archives of this issue

view archives of Shopping Centers Today - FEB 2015