Taubman Centers in Bloomfield Hills Reports Strong Second-quarter Results, Details South Korea Mall Project

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Taubman Centers Inc. in Bloomfield Hills today announced that its Taubman Asia division will invest between $140 million and $150 million in a new 1.1-million-square-foot shopping mall in Anseong, Gyeonggi Province, South Korea, a high growth city in the Greater Seoul Metropolitan Area.

The project, first announced in June, is a joint venture with Shinsegae Group to build, lease, and manage the development. The total cost is expected to be between $570 million and $600 million. The center is expected to open in late 2020.

Taubman’s total investment represents a 24.5 percent interest in the center (although the company currently owns and is funding 49 percent of the project until an additional capital partner is admitted). Shinsegae owns 51 percent of the project, and an institutional investor is expected to own the other 24.5 percent.

Starfield Anseong will be anchored by E-Mart Traders, PK Supermarket, ElectroMart, Sports Monster, an upscale cinema, and several of Shinsegae’s successful entertainment concepts including Aquafield and Toy Kingdom.

Taubman Centers, founded in 1950 by the late A. Alfred Taubman, is an S&P MidCap 400 Real Estate Investment Trust engaged in the ownership, management, and/or leasing of 26 regional, super-regional, and outlet shopping centers in the U.S. and Asia. Taubman Asia, founded in 2005, has its headquarters in Hong Kong.

In announcing second-quarter financial results today, Robert S. Taubman, president, CEO, and chairman of Taubman Centers, says the company was pleased with its results, having benefitted from increased rents and expense savings.

The company reports it received significant lease cancellation income in the second quarter of 2017, impacting the comparability of the year-over-year second quarter Adjusted FFO results.

For the quarter, comparable center NOI, excluding lease cancellation income, was up 3.5 percent, bringing year-to-date growth to 4.1 percent. Including such income, comparable center NOI was up 1.7 percent, bringing year-to-date growth to 5.4 percent.

“Comparable center NOI growth exceeded our expectations again this quarter. The newest centers in our comp pool — International Market Place in Hawaii, CityOn.Xi’an in China, and Starfield Hanam in South Korea — produced especially strong growth. We also benefitted from higher overage rents, a result of strong tenant sales in the quarter, and greater net recoveries. As a result, we are increasing our NOI guidance for the full year,” says Taubman.

Comparable center tenant sales per square foot increased 6 percent from the second quarter of 2017. This brings the company’s 12-month trailing sales per square foot to $807, an increase of 5.6 percent from the 12-months ended June 30, 2017. Year-to-date, tenant sales per square foot were up 9.1 percent.

Tenant sales per square foot in the company’s U.S. comparable centers were up 5.1 percent in the quarter, bringing 12-month trailing U.S. sales per square foot to $845, an increase of 5.2 percent from the 12-months ended June 30, 2017. Year-to-date, U.S. sales per square foot were up 8.2 percent.

“We were encouraged to see strong growth in tenant sales once again this quarter,” says Taubman. “Our newest comp centers and our tourist-oriented centers performed particularly well.”

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