Shopping Mall Occupancy Hits 27-Year High

As of the tail end of 2014, merchants were occupying malls like it was 1987.

According to a report on property data from the International Council of Shopping Centers (ICSC) and the National Council of Real Estate Investment Fiduciaries (NCREIF), occupancy rates at U.S. shopping malls (which includes super-regional and regional malls) were 94.2 percent for Q4 2014 — a level not seen in 27 years.

Under the broader auspices of shopping centers, occupancy rates were at 92.7 at the end of 2014, the report showed. The figure represented the highest level in that category since Q2 2008.

ICSC additionally found that mall sales productivity reached an annualized total of $475 per square foot — a number that has thus far seen annual growth since 2009, when it was $383.

While occupancy rates and sales productivity at shopping centers grew, so did the cost of rent. According to the report, base rents at shopping centers increased 6.5 percent from 2013 to 2014, the third annual gain in as many years and the highest rate seen since 2008. For the mall segment, base rents grew 17.2 percent in 2014, marking the greatest annual increase since ICSC and NCREIF started tracking that particular data in 2000.

As for income, from 2013 to 2014, both shopping centers and shopping malls experienced the highest annual growth rate in net operating income (NOI) since 2000. The report showed that NOI at malls went up 17.5 percent in Q4 2014, and 21.3 percent for the year overall. At shopping centers, NOI increased 8.3 percent in 2014.

“The 2014 data paints a very strong picture of the shopping center industry for the year ahead, and is especially promising in the mall segment,” said ICSC spokesperson Jesse Tron in a company release. “Record growth in key indicators such as occupancy and NOI strongly indicate a healthy outlook and further underline the ability of the industry to innovate to fit the needs of today’s consumer.”

Developing new malls may still not be the “booming business” it is in China nowadays, but perhaps the U.S. mall isn’t so doomed after all.


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