Mills Joins Asia Bandwagon

ARLINGTON, VA-The Mills Corp., like competitors Simon Property Group and Taubman Centers, is looking to Asia to develop new shopping centers. Executives announced their intention on Friday during their quarterly conference call.

Laurence Siegel, Mills’ CEO, says his company is targeting two countries for projects in the continent but would not specify which ones they are. Mills executives could reveal the markets by the end of the year, he says.

When Mills does decide to enter Asia, the company will likely take the same tact it has in Canada and Europe, where it formed partnerships with local developers. Outside of Toronto, for example, Mills opened the 1.1 million-sf Vaughan Mills last year with Canadian mall owner Ivanhoe Cambridge.

Mills and Ivanhoe Cambridge are looking at sites in Calgary and Montreal. In Europe, the REIT is looking at sites in Italy and Spain. On that continent, the company owns Madrid (Spain) Xanadu, St. Enoch Centre, in Glasgow, Scotland; and is building a center in Rome called Mercati Generali.

Domestically, the company is exploring the development of two new centers in California, one in Viejo, CA, the other on the site of football stadium Candlestick Park (now Monster Park) in San Francisco. The company also expects to finish the entitlement process in the spring to build a retail-entertainment center called Piers 27-31.

Executives also revealed the cost of their 4.8 million-sf retail-entertainment center Meadowlands Xanadu project to be $1.2 billion. The company has started foundation work on the center, scheduled to open in 2007, and Mills officials say they are receiving interest in the project from potential specialty retail tenants.

For its Q2, which ended June 30, Mills reported a loss of 30 cents per diluted share compared to a gain of 38 cents over the same period last year, due to currency exchange losses, gains on the sale of JV interests in 2004 and an increase of depreciation and amortization of 40 cents from consolidated and unconsolidated properties. FFO jumped 7.4%, to $1.01 per diluted share. Mills is the owner 42 properties in the US, Canada in Europe.