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PUERTO RICO PORTFOLIO OVERVIEW BY THE NUMBERS
15 # of assets
5.1 MSF Total GLA (average size of 340,000 SF)
700,000 Average trade area population vs. domestic of 415,000
13.5% % of DDR NOI (pro rata)
>3.5% Estimated 5 year NOI CAGR for the portfolio
$550 PSF The sales PSF of DDR’s top 3 malls in Puerto Rico...
60% ...and those 3 malls account for 60% of the value
70% % of ABR from U.S.-based retailers
5 out of 11 # of DDR centers among the top Puerto Rico centers in terms of traffic volume
8 out of 15 # of DDR centers anchored by Walmart in Puerto Rico; all 8 are owned by DDR
10 out of 15 # of DDR centers with a grocery component
Source: Arco Publicad[ 3 ]
THE PUERTO RICO PORTFOLIO IS ACCRETIVE TO THE COMPANY’S OPERATIONAL METRICS
+ 40% vs.
DDR Prime
+ 75% vs.
DDR < 10 ksf
Rent PSF Rent PSF$20
$15
$10
$5
$0
$40
$30
$20
$10
$0DDR Puerto Rico DDR
< 10 ksfDDR Puerto Rico
< 10 ksfDDR Prime
Leased Rate
DDR Overall DDR Puerto Rico
100%98%96%94%92%90%88%86%
1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q10 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14
Steady Relative PerformanceDuring U.S. Recession
[ 4 ]
LEASING TRENDS REMAIN STRONG WITH HIGH VOLUME AND GROWING RENTS
Puerto Rico Leasing Volume 600
500
400
300
200
100
02009 2010 2011 2012 2013
(000
SF)
> 2 MILLION SF LEASED SINCE 2009 AT A BLENDED SPREAD OF 7.5%
[ 5 ]
LEASING SPREADS ARE IN EXCESS OF MAINLAND U.S., AND RECEIVABLES HAVE DECLINED DRAMATICALLY
Puerto Rico Receivables >120 days:
New Leasing Spreads (2012 - 2013) Renewal Leasing Spreads (2012 - 2013)
1401201008060402003Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13
20%
25%
15%
10%
5%
0%
8%
10%
6%
4%
2%
0%Puerto Rico Mainland U.S. Puerto Rico Mainland U.S.
Greater than a 75% decline in the last �ve yearsGreater than a 75% decline in the last �ve years
QoQ
Chan
ge (i
ndex
ed to
100
)
[ 6 ]
THREE ENCLOSED, REGIONAL MALLS MAKE UP >60% OF THE VALUE OF THE PUERTO RICO PORTFOLIO AND GENERATE AVERAGE SALES PSF OF $55O
PLAZA DEL SOL PLAZA RIO HONDO PLAZA DEL NORTE
SIZE 686 ksf 551 ksf 681 ksf
ABR (MILLIONS) $17.3 $14.4 $12.4
ANCHORS
Walmart Home Depot Bed Bath & Beyond Old Navy
Kmart Marshalls T.J.Maxx Best Buy
Walmart Sears T.J.Maxx JCPenney
• Sales performance of these three malls is comparable to top U.S. centers including Woodfield Mall (Chicago), Easton Town Center (Columbus), and Short Pump Town Center (Richmond)
• However, given the value-oriented price point of DDR’s malls on the island, a significantly greater volume of transactions is required to achieve comparable sales PSF relative to the “A” malls in the U.S.
[ 7 ]
TRAFFIC VOLUMES PSF ARE WELL IN EXCESS OF THE MOST HIGHLY VISITED U.S. MALLS
DDR-OWNED PUERTO RICO MALLS
TOP TIER U.S. MALLS
PLAZA RIO HONDO
PLAZA DEL SOL
PLAZA DEL
NORTE
MALL OF AMERICA
(MN)
HOUSTON GALLERIA
(TX)
ROOSEVELTFIELD (NY)
TYSON’SCORNER
(VA)
KING OFPRUSSIA
(PA)
ANNUAL VISITORS (MILLIONS)
17 19 13 40 24 22 22 25
GLA (000 SF) 551 686 681 4,200 2,235 2,258 1,958 2,470
VISITOR PSF 31 28 19 10 11 10 11 10
Source: Company documents, property websites, Philadelphia Business Journal, Fairfax Times, Travel and Leisure[ 8 ]
SIGNIFICANT SUPPLY CONSTRAINTS AND POPULATION DENSITY
25
20
15
10
5
0United States
Retail Square Footage per Capita
Puerto Rico
THE SAN JUAN MSA CONTAINS 2.5 MILLION PEOPLE WHICH WOULD RANK IT IN THE TOP 25 U.S. MSA’S WITH A COMPARABLE POPULATION TO CHARLOTTE, DENVER, AND BALTIMORE
[ 9 ]
TOPOGRAPHY AND THE ENTITLEMENT PROCESS DRAMATICALLY LIMIT NEW SUPPLY
SAN JUAN
LEGENDP.R. Highway System
[ 10 ]
SAN JUAN
22
167
20
3
17
1
1
2
3
2222
18
66
26
26
San Juan International Airport
Old San Juan
Plaza del SolBayamón, Puerto Rico
Señorial PlazaRío Piedras, Puerto Rico
Plaza EscorialCarolina, Puerto Rico
Plaza Río HondoBayamón, Puerto Rico
Rexville PlazaBayamón, Puerto Rico
Plaza CarolinaCarolina, Puerto Rico
Plaza Las AméricasSan Juan, Puerto Rico
San Patricio PlazaSan Juan, Puerto Rico
Santa Rosa MallBayamón, Puerto Rico
Mall of San JuanSan Juan, Puerto Rico
DDR CentersCompetition
LEGEND
[ 11 ]
[ 13 ]
“Our first two stores in Puerto Rico have registered higher sales volumes than any other state or market where Anna’s Linens has presence. These sales established precedents, as they surpassed our sales projections by almost 50% after the first month of operations.”
- Alan Gladstone, President, Anna’s Linens, 3Q12
[ 14 ]
“Walmart, the island’s leading retailer, with estimated total sales of $2.5 billion from their combined Walmart, Walmart Supercenter, Amigo supermarkets and Sam’s Club stores, had yet another growth year, according to Iván Báez, Walmart’s vice president of corporate communications.”
- Caribbean Business
[ 15 ]
“The stores down here are performing above our average. That’s a good thing and that’s why we’re comfortable investing. Since we’ve opened on the island, we’ve sold more than 500,000 pairs of shoes.”
– Todd Beurman, SVP of Marketing, Shoe Carnival, 4Q13
[ 16 ]
“We already celebrated a year here on the island, and during this time we have been able to prove that Shoe Carnival is a good fit in the Puerto Rico market for retail sales. We started with two stores and we’re now going to have seven.”
– Todd Beurman, SVP of Marketing, Shoe Carnival, 4Q13
PUERTO RICO IS A LOW RISK AND HIGH PRODUCTIVITY EXPANSION MARKET FOR U.S. RETAILERS
LOW RISK HIGH PRODUCTIVITY
• U.S. Rule of Law
• Potential for statehood
• Lack of currency risk
• Lack of landlord risk
• Strong brand awareness
• Culture of consumerism
• Shopping centers act as “gathering places”
Puerto Rico Sales Volume vs U.S.
• Walmart +135%
• Home Depot +100%
• Sally Beauty +100%
• Champs Sports +70%
• Gamestop +45%
• Old Navy +45%
• Marshalls +40%
• PetSmart +40%
• Shoe Carnival +20%
[ 17 ]
DDR’S OWNED ANCHOR STORES IN PUERTO RICO HAVE GROWN SALES PSF AT OVER 3% ANNUALLY SINCE ACQUISITION
Anchor Sales PSF (>20 ksf)$450
$425
$400
$375
$350
$325
$300
$275
$2502005 2006 2007 2008 2009 2010 2011 2012 2013
+3% CAGR
[ 18 ]
DDR’S OWNED ANCHORS SALES GROWTH IS POSITIVE DESPITE MACROECONOMIC WEAKNESS
Anchor Sales vs GDP Growth6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%2006 2007 2008 2009 2010 2011 2012 2013
DDR Anchor Sales Growth YoY
PR GDP Growth
[ 19 ]
NUMEROUS U.S. RETAILERS HAVE LEVERAGED DDR’S PLATFORM TO ENTER THE ISLAND WITH GREAT SUCCESS…
[ 20 ]
…AND STRONG INTEREST CONTINUES FROM OTHER RETAILERS LOOKING TO EXPAND ON THE ISLAND IN THE FUTURE
[ 21 ]
EXTENSIVE REDEVELOPMENT ACTIVITY ON THE ISLAND AT ATTRACTIVE RISK-ADJUSTED RETURNSPLAZA DEL NORTE - COMPLETED
SCOPE: Consolidated historically vacant space for the 30ksf expansion of JCPenney, a small shop consolidation of three shop units to accommodate a new PetSmart, a new upper level Caribbean Cinemas, and significant interior mall renovations
INVESTMENT: $12.6 Million YIELD: 13.5% LEASED RATE: Increased from 85% to 97%
% SMALL SHOP GLA: Decreased from 24% to 20%
PLAZA DEL SOL - COMPLETED / ACTIVE
SCOPE: Phase I: Relocated existing lower level food court to the newly expanded upper level in order to convert lower level space into highly-trafficked central corridor in-line space; Phase II: Construct an additional 125ksf of new junior anchor spaces
INVESTMENT: $65.7 Million YIELD: 9.3%PHASE I:Complete
PHASE II:Fall 2015
PLAZA SEÑORIAL - FUTURE
SCOPE: Consolidate historically vacant small shop space to accommodate a US junior anchor looking to expand on the island
INVESTMENT: $4.8 Million YIELD: >10%
PROJECTED COMPLETION:Summer 2015
TOTAL PR REDEV PROGRAM
SCOPE: Due to significant retailer demand for space in Puerto Rico, we continue to grow our successful redevelopment initiative on the island
COMPLETED PROJECTS: $57 Million YIELD: 11.8%
ACTIVE/FUTURE PROJECTS:$75 Million
YIELD:>10%
[ 23 ]
COMPLETED REDEVELOPMENT: PLAZA DEL NORTE - BEFORE
XX
XX
XX
X
X
X
XX X X
XX
XX
XMUNICIPAL RD
MUNICIPAL RD
FOODCOURT
±3,195 SFC
107
B119
E140
E141
A116
A122A125A126
A12
8
A13
0A
A13
0B
B100B102B106
B110B112B114
B116GRAN VIA5,200 SF
B118
B120
B126 B128 B129
B13
0B
132
C09
9
C100
C10
2C
104
C10
6
C10
8C
109
C11
0C
111
C11
2
D10
0D104D106D108D110
D116MARIANNE11,292 SF
D120D122
D126D130
D13
4
D14
0 D14
4D
146
D14
7
D150
E124E130
E132E136A
E136B
F100
F102
F104
F106
F108
F110 F112 F114F116
F118
F120
J122
K10
2 K108
KK1KK2
KK
3K
K3A
KK
4K
K5
KK
6
KK
7K
K8
KK9
KK
10
KK11
KK12
KK
13
KK20
L100
L102
L106
L108
L112
OP2PONDEROSA
6,000 SF
OP3OP3A
Q2 Q3
S100
W200AVAILABLE10,096 SF
A110
A112102.1'
100'100'
200'
159.1'
200'
36.3' 40.5'
75'
22.3
'
30.3'
24'
70'
31.7
'
83'
59'
24.8'16.2'
27.5'15.8' 33.4'
40.8
'
22.1
'
23.8'
95.2
'
30.5
'55.4'
42'
18.2
'13.1'
25.7'
53.4
'
2.7'
21.6' 22' 29' 24' 20' 20.2' 20.2' 20' 31'
21.6'
67.2'
15.2'10.7' 22'
18.7'24'24'
24.4'
25.6'
30.5'
55'
68.2
'
103'
13.2
'30
.6'
18'
21'
21'
24'
24'
28.7
'
33.6
'
26.3'
20'
103'
25'
62.9' 14.1'
32.5'55.9'
20.7'
70.5'
98.2'
96.3'
71.6'
83.5'
66.8'
12.8'
33.5'26.9'57.1'
211.7'
26.4' 43.5' 31.4' 33' 42.3' 13.2'21.1'
103.6'
23.8' 23.8'
14.4'
14.5'
44.7'
102.2'
340'
18.8
'49
.3'
20'
20'
40'
20'
39.2
'
88.7
'
111.
2'20
'20
'20
'23.4' 30
.9'
212.
3'
27'
45.6'
41.7
'
87.2
'
89.9
'
25'
47'
23'
29.4
'40'
25.4
'
45.1
'
182.
2'
19.8
'
34'
50'
29.1'
38' 112.4' 22.2' 16' 36.4' 29' 22.6'
388.8'
35.7'
81.5'
73'
49.4
'
260'
147.
7' 39.7'
77.9
'
76.8' 79.8'
46.8'
53.2'
59.9'
147.8'
103'
36.2'
42.8'
23.6'
34.1
'
138.
1'
105.
3'16
.6'
41.6'
101.
4'
41.7'
30'
24.6
'31
.6'
40.6
'
78.2
'
27.2'
17.3'
84.9
'
AVAILABLE
Pre - Redevelopment
[ 24 ]
COMPLETED REDEVELOPMENT: PLAZA DEL NORTE - AFTER
Post - RedevelopmentX
XX
XX
X
X
X
X
XX X X
XX
XX
X
MUNICIPAL RDMUNICIPAL RD
FOODCOURT
±3,195 SF
6
8
C10
7
B119
E140
E141
A116
A122A125A126
A12
8
A13
0A
A13
0B
B100B102B106
B110B112B114
B116GRAN VIA5,200 SF
B118
B120
B126 B128 B129
B13
0B
132
C09
9
C100
C10
2C
104
C10
6
C10
8C
109
C11
0C
111
C11
2
D10
0D104D106D108D110
D116MARIANNE11,292 SF
D120D122
D126D130
D13
4
D14
0 D14
4D
146
D14
7
D150
E124E130
E132E136A
E136B
F100
F102
F104
F106
F108
F110 F112 F114F116
F118
F120
J122
K10
2 K108
KK1KK2
KK
3K
K3A
KK
4K
K5
KK
6
KK
7K
K8
KK9
KK
10
KK11
KK12
KK
13
KK20
L100
L102
L106
L108
L112
OP2
OP3OP3A
Q2 Q3
S100
W200AVAILABLE10,096 SF
A110
A112102.1'
100'100'
200'
159.1'
200'
36.3' 40.5'
75'
22.3
'
30.3'
24'
70'
31.7
'
83'
59'
24.8'16.2'
27.5'15.8' 33.4'
40.8
'
22.1
'
23.8'
95.2
'
30.5
'55.4'
42'
18.2
'13.1'
25.7'
53.4
'
2.7'
21.6' 22' 29' 24' 20' 20.2' 20.2' 20' 31'
21.6'
67.2'
15.2'10.7' 22'
18.7'24'24'
24.4'
25.6'
30.5'
55'
68.2
'
103'
13.2
'30
.6'
18'
21'
21'
24'
24'
28.7
'
33.6
'
26.3'
20'
103'
25'
62.9' 14.1'
32.5'55.9'
20.7'
70.5'
98.2'
96.3'
71.6'
83.5'
66.8'
12.8'
33.5'26.9'57.1'
211.7'
26.4' 43.5' 31.4' 33' 42.3' 13.2'21.1'
103.6'
23.8' 23.8'
14.4'
14.5'
44.7'
102.2'
340'
18.8
'49
.3'
20'
20'
40'
20'
39.2
'
88.7
'
111.
2'20
'20
'20
'
23.4' 30.9
'
212.
3'
27'
45.6'
41.7
'
87.2
'
89.9
'
25'
47'
23'
29.4
'40'
25.4
'
45.1
'
182.
2'
19.8
'
34'
50'
29.1'
38' 112.4' 22.2' 16' 36.4' 29' 22.6'
388.8'
35.7'
81.5'
73'
49.4
'
260'
147.
7' 39.7'
77.9
'
76.8' 79.8'
46.8'
53.2'
59.9'
147.8'
103'
36.2'
42.8'
23.6'
34.1
'
138.
1'
105.
3'16
.6'
41.6'
101.
4'
41.7'
30'
24.6
'31
.6'
40.6
'
78.2
'
27.2'
17.3'
84.9
'
EXPANDED JCP; RENOVATED MALL; NEW LEASES WITH:
[ 25 ]
ACTIVE (PHASE I) REDEVELOPMENT: PLAZA DEL SOL
ABOVEOPEN TO
KK10BKK12 KK14 KK15
KK16KK16A
KK17
FOOD COURT
BELOWOPEN TO
KK19 KK18
CA
SA
MO
FON
GO
TRAFFIC SIGNALEXISTING TRAFFIC SIGNAL
PR 29
PR 1
67
TRAFFIC SIGNAL
20'42.8'
26.34'
110.
84'
5
9
12
26 32 32
14
10 3 27 13
11
4
3
15
15
2434
9
9
9
5661
62 6169
6
7474 75
28
3162
70
85
7
9796
40
10
617
19
38
46
6
34
60
64
36
27
4
197
36
56
15
15
21
21
11
15
7
37
12
28
50
22
8
5
6
25
22
12
12
5
16
2924
36
19
13
4
20
4
19
7
47
269
622
519
1090
123
47
30
61
228
TRAFFIC SIGNAL
18.7'
FOOD COURT
1580
1585
1570
1200
1000
1575
1608
1005
1010
1020
1030
1035
104010501055
10601065107010801085
1100
1100A1100B
1120
1125
11271130
11401145
1170
12051210
1215
1230
1240
1260
1280
1415142014301460
1480
14901500150515101520
1530
1535
1540
1600
164016031601
1604
1605
1606
1607
1610
1620A1620B
1625
1630
CHARLOTTE
RUSSE
7,142 SF
1710
1720
1770KK01
KK02
KK03 KK04
KK4A
KK05
KK06
KK07
KK08
KK10
KK09
KK10B
KK11
KK12
KK13
KK14 KK15KK16
KK16A
KK17KK17A
KK20
KK21KK23
KK22
KK24
49.1' 20' 50' 25.9' 18.3'
20.9'
28'
102.5'
43.7'
101'
79.3'
30'
38.8'
99.2'
23.6'
147.3'
114'80'
22.7'20'
23.7'20'
61.9'
41'
43.2'45.5'
108.3'
29.1'
36.9'
44.2'
62.3'
65.9'
21.1'39'60'21'30'28'
22'22'23'
92.7'
101'
24.2'29.1'
30'31.1'
26.8'35.6'
40'
20'
20'
23.7'
25'
21.8'
51.9'
27.1'35'
20'
65.7'37.7'
33.5'
40'
15'15'
110'
38.5' 43'
32'
12'
115.
85'
31.3'
304'
153'38'
73'24'152'
81'
38'
58'
38'
180'
40'
36'
379'
129'
151'
60'99'
100'
49'64'
22.2'20'
24'
20'
23.2'25.7'
19.5'47.5'
73.1'
Post - Redevelopment26K SF of New Lower Level Retail
Opened Fall 2013
Post - RedevelopmentNew Upper Level Food Court
Opened Winter 2012
Pre - Redevelopment
Activ
e Ey
e
RELOCATED FOOD COURT AND ADDED 26,000 SF OF NEW LOWER LEVEL RETAIL FOR:
[ 26 ]
ACTIVE (PHASE II) REDEVELOPMENT: PLAZA DEL SOL FUTURE EXPANSION TO ACCOMMODATE FOUR JUNIOR BOXES (125KSF)
EXISTING CONDITION
FUTURE PARKING GARAGE ADDITION
FUTURE THIRD LEVEL RETAIL
[ 27 ]
FUTURE REDEVELOPMENT: SEÑORIAL PLAZACONSOLIDATE CHRONICALLY VACANT SHOP SPACE FOR A U.S.-BASED SOFTLINES RETAILER LOOKING TO EXPAND ON THE ISLAND DRIVING DEMAND AND RENT FOR SHOP SPACE.
ELEC.
30'
40'
19.5
'P A R A N A S T
MALL CORRIDOR
NO 3 ST
NE
W
LO
MA
SV
ER
DE
12.7'
MALL CORRIDOR
128
441
351
24
6
23
9
43
48
64
16
20
10
33
12
34
22
26 7
3
31
21
10
9
6
9
3
20
9
9
11
25
17
18
19
16
60
40
3523
40
5
17
17
18
CAR
ITE
STNO
3A
ST
SA
VE
(PR 177)
WIN
STO
NC
HU
RC
HIL
LA
VE
MALLENTRANCE
MALLENTRANCE
FOODCOURT
MALLENTRANCE
MALLENTRANCE
ELEC.RM.
E002
E002
AE0
03K
RE
SS
5,40
0 S
F
E004
E005
MA
RIA
NN
E5,
250
SF
E006
LA E
SQ
UIN
A F
AM
OS
A6,
600
SF
E006
AE0
07E0
08E0
09
E019
E020E021
AE0
21B
E021
C
E022
E023
E024
E025
E026
E028E029
E030
E031
E032
A
E033
E039
E043
E044
E045
E047
E049
120'
'4.16'4.46
22' 23'
20' 60'
45' 20' 40' 55'
20'
60'
37.5
'
33.5'
22'
18'
25'
14'
40'
14'
20.8'
50'
30'
100'
40'
30'
30'14'
21.5
'
30.1'
35.3
'
13'
10'
15'
55' 55'
90'
25'
44'
109'
143.
8'
15'
85'
62.5
'
35'5'
33.6'
40'
25'30'30'
49.5
'
38.7'
22'
49.5
'
36.5
'
40' '02'03
75'
30'
28.3
'
15'
18'
120'
90'
75'
80'
201.
5'
14.7'
30'
45'
147'
32'
68.5'
38.8'
55'
50.5'
208'
167'
70.5'
31.7
'
86.7'
35.8'
39.3
'
300'
22'
21.9'
21.2'
39.6'
22.5' 22.2'
34.1'
14.6'
30.8'
115.
6'
Post - Redevelopment
Pre - Redevelopment
VACANT
VACANT
VAC
AN
T
VACANT
VACANTVACANT
VACANT
VAC
AN
T
VAC
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T
Future Jr. Anchor
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SUMMARY
• Tenant sales and NOI growth remain accretive to the domestic portfolio
• Significant supply constraints + strong demand from U.S. retailers allow for continued rent growth and the ability to upgrade the credit quality of cash flows
• A number of redevelopment opportunities exist to achieve attractive risk-adjusted returns greater than 10%
[ 29 ]