Kimco Realty Corporation (NYSE: KIM) Vice Chairman, President and CEO David Henry says he is optimistic about international expansion, emphasizing positive market fundamentals in countries such as Canada and Mexico.
In a video interview with REIT.com at REITWeek 2012: NAREIT’s Investor Forum in New York, Henry said the most recent catalyst for growth in the Canadian market was an annoucement by discount retailer Target that it plans to open 25 stores per quarter in the country, beginning in 2013.
“Of course, that’s generated a lot of demand for retailers to be next to Target,” he said, adding that this gives the company more pricing power. He also noted that Kimco’s occupancy rate in Canada has never been lower than 97 percent.
“In Canada, it’s all green lights. Retailers like Marshalls and Bed Bath & Beyond are doing very well in Canada. We continue to be very positive about the long-term prospects,” Henry said.
Kimco is also focusing on expanding in Mexico. While concerns over crime in the country have drawn headlines recently, Henry pointed out that the country’s overall economy remains healthy.
“GDP growth last year was just under 4 percent, and this year it should be just under 4 percent as well,” Henry said in reference to the Mexican economy. “The unemployment rate is about 5.5 percent, and they created a million jobs this year.”
Henry illustrated the need for more shopping centers in Mexico by pointing out that in the United States there are 100,000 neighborhood and community-based shopping centers. In Mexico there are only approximately 1,000 such properties.
“So it’s very under-retailed,” he said. “U.S. retailers have expanded into Mexico, and we see that continuing.”
Henry also discussed his prognosis about shopping centers overall. Upon returning from the International Council of Shopping Centers (ICSC) convention in Las Vegas in May, he said the mood was optimistic among retailers. The upcoming national elections in November and general sense of political uncertainty are causing some concern for retailers, he said. However, he noted that he doesn’t see any evidence that those concerns will affect retailers’ plans.
“Most retailers have strong balance sheets and a desire to expand,” he said.