Yahoo Finance General Growth Properties: Redevelopment Could Raise Its Top Line
General Growth Properties: Its Ups and Downs of 4Q15
Redevelopment is the engine of growth
General Growth Properties (GGP) has development and redevelopment activities totaling approximately $2.3 billion, of which projects totaling $1.3 billion have already been opened, $400 million in projects are under construction, and $600 million are in the pipeline. The bulk of the projects are expected to be delivered in 2016. The company stated that they are on target to achieve the 8% to 10% unlevered returns upon stabilization in 2017.
CEO Sandeep Mathrani said “on the redevelopment front, we were very pleased to open several major projects during the fourth quarter on time and on budget including, the expansion of Ala Moana with a return of 11%, the expansion of Baybrook Mall with the return of 9%, the completion — complete renovation of Southwest Plaza with a return of 9%, the grand opening of Nordstrom at Ridgedale with a return of 8%, and the grand opening of Nordstrom at Mayfair mall with the return of 8%, a number of other redevelopment products across the portfolio.”
Prior to 4Q15, General Growth Properties opened various projects worth $500 million, and in 4Q15, the company opened projects worth $778 million. The company also sold its interests in four retail properties in January 2016 for net proceeds of $250 million.
Stock repurchase
In 4Q15, the company acquired approximately 271,000 of its common shares, at an average price of $25 per share, for $6.8 million. In fiscal 2015, the company acquired approximately 4.3 million of its common shares, at an average price of $25.34 per share, for $109.5 million.
The iShares Cohen & Steers REIT ETF (ICF) invests 2.1% of its portfolio in General Growth Properties. Peers Simon Property Group (SPG), Macerich (MAC), and Taubman Centers (TCO) have weights of 7.5%, 2.5%, and 0.1%, respectively, in the same portfolio. Continue to the next part of this series for a discussion on General Growth Properties’ debt level.
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