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Brookfield Reports Traffic and Sales Approaching Pre-Pandemic Levels

Customer traffic was as much as 70 percent of normal levels at Brookfield’s malls, with almost all tenants open, Chief Executive Officer Brian Kingston said on a conference call with analysts.
An empty Brookfield Place in Manhattan | Source: Spencer Platt/Getty Images
By
  • Bloomberg

NEW YORK, United States — One of the biggest mall owners in the US says business is coming around again.

Brookfield Property Partners LP said sales at its retail properties were “approaching normalised levels” in the third quarter — in some cases surpassing year-earlier benchmarks — as shoppers began to return after Covid-19 lockdowns lifted.

Customer traffic was as much as 70 percent of normal levels at Brookfield’s malls, with almost all tenants open, Chief Executive Officer Brian Kingston said on a conference call with analysts. Sales for retailers in certain segments, such as luxury goods and jewelry, were as much as 26 percent higher than last year’s third quarter, he said.

Malls are facing an uncertain future, squeezed between consumers’ accelerating adoption of e-commerce and a resurgence of coronavirus cases that makes indoor shopping seem risker, while raising the possibility of new government-ordered shutdowns. Even with the improvement in traffic, Brookfield only collected about 75 percent of rent due from mall tenants, contributing to a $135 million net loss for the quarter.

The company, which acquired mall owner GGP Inc. two years ago, said it expects rent collections to largely recover by next quarter.

“Many of the weaker balance sheets or more-challenged retailers have hit the wall and gone bankrupt or restructured and worked through, and we’ve taken those impairments,” Kingston said. “I think what we’re left with right now is a much stronger field of tenants, whose businesses have largely stabilized.”

Still, the company expects to shed some of its 170 malls as the pandemic widens the sales gulf between down-market or out-of-the -way properties and those that are centrally located and on the higher end, the CEO said.

A number of Brookfield’s lower-end malls are now worth less than their mortgages, according to Kingston. The company is in discussions with lenders to either hand over the keys to those properties or restructure the debt, he said.

The company’s shares fell 5.2 percent to $13.99 at 2:24 p.m. New York time. They’re down 23 percent this year.

By Ari Altstedter

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