Archive | Taubman

Published: 24 April 2005

Taubman Centres Inc, a US reit which beat off a takeover bid by Simon Property Group & Westfield in 2003, has formed a Hong Kong-based division to expand into Asia.

It will be headed by Morgan Parker, an Australian who spent 7 years with Lend Lease Corp & Macquarie Bank in Asia before becoming a vice-president of Morgan Stanley. At Morgan Stanley he was based in Tokyo, overseeing Morgan Stanley Real Estate Fund’s Asian retail investment & management businesses. He was also president of Promena Retail Properties, a subsidiary of the Morgan Stanley fund specialising in retail asset & property management in Japan.

Taubman Asia will seek projects that leverage Taubman Centres’ strong retail planning, design & operational capabilities. With the Morgan Stanley fund, Taubman Asia has started evaluating opportunities, including the previously announced New Songdo City project in Incheon, South Korea.

Taubman Centres owns &/or manages 22 regional & super-regional centres in 10 US states and has 2 more under construction.

Taubman increased first-quarter diluted funds from operations by 5.7% to US53c/share but earnings/share fell from US7c to US5c. It said occupancy rose 2.2 points to 88.4%, and to 90.6% including temporary tenants. Sales/m² rose 7.2%.Web site: Taubman

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Taubman Centres Inc, the US mall owner which fought a long & ultimately successful battle last year against takeover by Simon Properties (which was joined by Westfield Group in a joint bid), has lost a large chunk of its business through the sale of 9 properties it managed.

General Motors Asset Management Corp swapped out of Taubman stock into direct ownership of the 9 malls in 1998, but decided this year to put half that interest on the market.

Virginia developer Mills Corp has bought the 50% for $US1.03 billion, including the assumption of $US170 million of debt, at 6.4% ungeared return. Although the GM trusts remain 50% owners, management moves to Mills on 1 November.

The deal cuts Taubman’s portfolio from 31 to 22 and raises Mills’ portfolio from 27 to 36 plus several development sites.

Taubman gets $US600,000 for its transition costs but will incur a $US6 million one-off charge relating to termination of the contracts and expects to lose $US4 million next year from its funds from operations & net income.

Taubman Centres Inc, the mall owner which beat off a takeover bid from Simon Property Group & Westfield last year, increased funds from operations 46.7% in the June quarter to US44c/diluted share (but up 7.3% if the costs incurred in fighting off the bid in 2003 are excluded), cut its net loss allocated to common shareholders from US26c to US8c/diluted share and improved its full-year forecast.

Mall tenant sales/ft² rose 8.3% for the quarter & 10.4% for the half.  “This is our strongest 6-month sales performance as a public company,” chairman, president & chief executive Robert Taubman said.

“We are especially pleased with the continuation of double-digit increases in all of our Florida centers this quarter, affirming our Florida investment strategy.”

Leased space at 30 June was 88.2%, up 0.2% on a year ago, total occupancy rose 0.4% to 85.2%. Including temporary tenants, occupancy rose 0.6% to 87.6%.

Average rent/ft² rose 4.1% to $40.92 for the quarter in the consolidated portfolio. Average rent for the quarter in the unconsolidated joint ventures rose 0.5% to $42.72.

“With 15 consecutive months of increasing sales in our centres, retailers are optimistic about their future prospects. We are converting this positive sales momentum into occupancy & rental increases at our centres,” Mr Taubman said.

Taubman has a $US2.6 billion portfolio of 31 urban & suburban regional & super-regional shopping centres in 13 states which it owns and/or manages.

Website: Taubman Centres

Hostile bid withdrawn after law change

US shopping mall owner Taubman Centers Inc has successfully fought off a takeover bid begun last November by Simon Property Group Inc and joined by Westfield America Inc.

Simon bid $US20/share for Taubman, a company controlled by the Taubman family although it didn’t own a majority of ordinary shares.

Judge Victoria Roberts ruled in the Michigan Federal District Court in May that the family & friends couldn’t vote their 33.6% series B shares until approved by a majority of disinterested public shareholders in compliance with the Michigan Control Share Act.

Michigan Governor Granholm signed an amendment to that act on Tuesday, overturning Judge Roberts’ ruling, so Simon and Westfield withdrew their bid yesterday.

“The new legislation allows the Taubman family group to effectively block Simon and Westfield’s ability to conclude their all-cash offer for Taubman common stock, which has been supported by the overwhelming majority of Taubman’s common shareholders,” Simon said.

Taubman reckons only 24% of shares were tendered into the offer.

Simon owns or has an interest in 238 malls, Westfield America owns a majority interest in 65 and Taubman owns or manages 31, but has a portfolio producing much higher returns.

Websites: Simon Property Group
Westfield Holdings
Taubman Centers