The retail real estate investment trust (REIT) – DDR Corp. (DDR) – announced the sale of three shopping centers in the Salt Lake City area for around $223 million to Excel Trust, Inc. (EXL). The move comes as part of DDR’s plan to exit from the Salt Lake City market.
Specifically, this portfolio included The Family Center at Fort Union, The Family Center at Orem and The Family Center at Taylorsville. In total, these properties span about 1.8 million square feet.
As a matter of fact, DDR has been following an aggressive capital-recycling program through strategic asset management, aimed at reducing currency and development risk and aiding expansion in premium U.S. markets. Consequently, the company is divesting its non-prime and non-income producing assets and using the proceeds for reinvestment in premium U.S. shopping centers.
Accordingly, DDR left the Brazilian market in the first half of 2014 through sale of 50% ownership stake in Sonae Sierra Brazil BV Sarl. On the other hand, the company completed four large format prime power center acquisitions across downtown Chicago, Sacramento, Cincinnati and Colorado Springs.
Also, the company had collaborated with an affiliate of The Blackstone Group L.P. (BX) to buy 76 shopping centers from American Realty Capital Properties, Inc.’s (ARCP). Such initiatives are expected to pave the way for top-line growth in the long term.
For Excel Trust, the addition of these assets would help strengthen its presence in the Salt Lake City market. Excel already enjoys reputable corporate and operating presence in this market.
Going forward, we believe DDR’s portfolio repositioning efforts and capital allocation strategies would help it ride on the growth trajectory. Yet, stiff competition and a rise in Internet sales limit any robust demand for its properties.
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