The US real estate investment trust specialises in retail and leisure-based schemes, often with a regeneration angle. It owns the ski-based Xanadu leisure scheme brand
Almost a year after opening Europe’s largest indoor snow facility, Xanadu in Madrid, US real estate investment trust (reit) The Mills Corporation has set its sights on Rome. The retail and leisure specialist is one of a shortlist of six bidding to develop the Mercati Generali site, just a mile from the Coliseum. Mills plans to develop a scheme of around 75,000m2, which would include the restoration of some historic buildings.
Unlike the 130,000m2 Xanadu, which was on a greenfield site, Mercati would present Mills with an opportunity to demonstrate its urban regeneration skills. “We don’t believe our prime focus in Europe will be the same as it was for Madrid Xanadu,” says Edward Vinson, Mills’ executive vice-president, international development. “That type of land may not be available, but Mills is very flexible in its approach to development.”
Mills has already taken on urban regeneration schemes in the US, such as 108 North State Street in Chicago and Piers 27-31 in San Francisco.
Xanadu, meanwhile – which is in Arroyomolinos, south-west Madrid – is expected to have between 18m and 20m visitors in its first year, rising to 30m annually. The scheme has 220 shopping, dining and entertainment tenants, including 20 anchors such as El Corte Ingles, Benetton, H&M and Nike. It also has a 15-screen cinema, an indoor go-cart track and a bowling alley.
Mills says it will always work with local partners in Europe (Parcelatoria de Gonzalo Chacon in the case of Xanadu). “We have knowledge about the business but not local markets,” says Vinson. As well as Northern Italy, Mills will continue to target Spain, particularly Seville, Valencia and Barcelona, and is looking at “a number of approaches, which are at various stages of approval”.
Mills is also part of a consortium planning a 92,900m2 redevelopment of the former Ravenscraig steelworks site, south of Glasgow in Scotland. UK developer Wilson Bowden is leading the bid, which includes housing, business parks, retail and leisure. Local commercial landlords are opposing the plans.
Mills, which has a market capitalisation of $5bn, is the owner and developer of 27 retail and entertainment schemes, totalling 3.16m m2. It has six projects under development, including Meadowlands Xanadu, a 427,350m2 mixed-use scheme in East Rutherford, New Jersey. Besides offices, retail, leisure and a hotel, the project will feature the US’s first indoor ski resort and an indoor mini-Formula One racing venue.
Fellow US reit Mack-Cali Realty Corporation will be lead developer for the office and hotel element, while German fund manager KanAm will be Mills’ investment partner. KanAm previously bought a 50% stake in Mills’ Great Mall of the Bay Area scheme for $136.5m, an usual sale for the reit, which usually retains its completed developments.
Vinson says that Mills expects to open one or two schemes a year in Europe, although it could expand through acquisition, boosting its existing portfolio and pipeline of developments. “We’re earnings driven; it is important for us to be as active as we can,” says Vinson. This, he says, includes looking at potential acquisitions. In the meantime, he adds that Mills’ individual mix of retail and leisure will stand it in good stead in Europe: “It is a competitive market, but we don’t have a lot of direct competition. No one does what we do.”
The Mills Corporation
1300 Wilson Boulevard, Suite 400
Arlington
VA 22209
Tel 703 526 5000
www.themills.com
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Financial highlights |
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The company owns 27 retail and leisure schemes |
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Aggregate gross leasable area |
3.16m m2 |
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Annual shopper visits |
220m |
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Portfolio occupancy |
94% |
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Total tenant sales |
$4.2bn |
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Source: The Mills Corporation |
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