INDIANAPOLIS–While its own schedule of retailer meetings at next month’s ICSC RECon meeting is strong, Simon Property Group warned the industry that it should prepare for a decade-long slowdown in new shopping center development.
Macroeconomic and industry issues will result in years of slow new center growth, benefiting major owners, said David Simon, chairman and CEO of Simon Property Group, at his company’s first-quarter conference call.
“Frankly, I see a decade where retail development will be slow,” Simon said. “And that will be fabulous for us and other major owners of retail real estate.”
After the industry slowdown of the late 1980s/early 1990s, which virtually shut down new center construction, developers focused on redeveloping existing projects for the rest of the decade. It was only after the trauma of the Sept. 11 attacks was assimilated, that new construction began in earnest, Simon said.
“It was 15 years before development picked up the pace again,” Simon said. “I don’t think it will be that long [this time] because everything is faster today.”
Even so, the number of retailer meetings is comparable to previous years, and a far cry from the types of meetings held in the early to mid 1990s, Simon said.
“There were several years where all we did were workouts,” Simon recalled. “I don’t sense this at all at the upcoming convention.”