Brookfield Property Partners plans to “future proof” a majority of General Growth Properties’ malls by turning them into mixed-use “mini cities.”
Executives of the firm said on Thursday during a third quarter earnings call that it plans to redevelop at least 100 of the 125 malls in GGP’s portfolio. The company estimates that it will spend between $800 million and $1 billion each year over the next few years to reposition or add office and/or residential space to the shopping centers.
The other 25 malls will be redeveloped with the aim to sell the properties, said Brian Kingston, senior managing partner and chief executive officer of Brookfield Property Group and Brookfield Property Partners.
Since closing on the $14.8 billion deal to acquire GGP in August, Brookfield has moved to add residential and office space to a number of the acquired shopping malls, including Stonebriar Centre in Texas, where the firm is building a hotel and plans to add residential and office space. Brookfield has already sold $4.2 billion worth of stakes in GGP to joint venture partners and plans to sell $2.5 billion more in the next 18 to 24 months, Kingston said.
The planned overhaul of GGP’s properties comes as retail continues to struggle against e-commerce. Still, Brookfield executives said on Thursday that retail leasing remains strong at the company’s properties, with internet-only companies — like home goods website Wayfair — showing interest in opening brick-and-mortar locations.
On the heels of the GGP closing, Brookfield is also awaiting the confirmation of another major acquisition. On Nov. 15, Forest City Realty Trust’s shareholders will vote on whether or not to approve Brookfield’s $6.8 billion acquisition of the REIT. Forest City’s former CEO Albert Ratner opposes the deal. If approved, Brookfield estimates the deal will close in December.