When Puerto Rico’s newest shopping center, The Mall of San Juan, opens today, it will do so with about a third of the tenant mix it expects to populate the 650,000 square-foot retail space by year’s end.
The $475 million property owned by stateside mall operator Taubman Centers will have 44 stores and carts ready for business today, of the estimated 120 total establishments expected to call the new mall home in coming months.
But opening a shopping center of this scope with a fraction of the tenants is not unusual, company CEO Robert Taubman told this media outlet Wednesday.
“It happens all the time, and it’s normal. We’re extremely patient. We want to curate and wait for the best merchandise and the best stores,” Taubman said. “We think long-term. We’re trying to set this as the dominant fashion project in this region. Not just in San Juan, but throughout the Caribbean.”
“By the end of this year, you’ll see so many new stores opening. We’re very excited about the investment pieces in this shopping center,” he said.
During a walk-through of the shopping center ahead of its opening, it was evident that there will be a healthy mix of high-end brands — such as Versace and Gucci — as well as more middle-of-the-road options to attract a wide scope of customers.
Manuel Vázquez, general manager of the shopping center, said the property is 80 percent leased, and should be fully leased by the end of the year. By mid-2016, The Mall of San Juan should be completely populated.
According to the run-down of the retailers signed up so far, more than 60 percent are unique to market, including anchors Nordstrom and Saks. With retail space still available, Taubman did not write off the possibility of more newcomers, including H&M, Urban Outfitters and Crate and Barrel.
But off the list are the likes of Lane Bryant, Barnes & Noble, and the Apple Store, executives confirmed.Taubman Centers CEO Robert Taubman and The Mall of San Juan General Manager Manuel Vázquez. (Credit: Juan Carlos Pedreira)
Current economy not a deterrent
Meanwhile, Taubman confirmed the current negative economic cycle that Puerto Rico is experiencing has not been a deterrent for the mall’s development. He also said Puerto Rico represents a great opportunity for retail, considering that the island offers 5 square-feet of retail supply per capita, vs. 24 square-feet stateside.
“People see this as a tremendous opportunity, and we believe there’s tremendous elasticity to the demand for this kind of retail. We expand the retail opportunity. Rather than dollars going outside the market into the U.S. mainland, Europe or other parts of Latin America, they’re now going to stay here,” he said.
“We think this is one of the best investment pieces for Taubman in 65 years, and will likely be among the top five shopping centers in our portfolio,” he predicted.
Even if there’s some atrophy in the economy, “we believe the basic thesis and that elasticity to demand is so high that we think this will be one of our top five shopping centers in our portfolio,” he ventured, saying The Mall of San Juan will likely top the $800 per square-foot sales figure of its best retail property.
“When you have a fashion-conscious customer that cares about brands, that hasn’t had the opportunity to buy them except when they travel to other destinations or buy over the Internet, we believe getting them here where they can go and shop is a powerful incentive to actually expand disposable income that’s being used and allocated to retail and better quality goods,” he said, explaining the company’s optimism about the Puerto Rican market.
The Mall of San Juan is one of six properties Taubman is developing practically simultaneously, with malls going up in Hawaii, Sarasota, Korea and China.