Taubman Centers has set its eyes on South Korea. The developer has signed a letter of interest with New Songdo City master managing partner for the exclusive rights to invest in, develop and be the managing general partner for a retail joint venture expected to be formed next year.
Taubman is following the lead of competitors Simon Property Group, General Growth and Mills Corp., which want to expand business through overseas ventures.
"We expect to know more within the next three to five months," says Barbara Baker, Taubman vice president of investor relations, noting the firm has key criteria that must be met. "We would like them to be in a sustainable program; not just a one-off opportunity. We want to align with strong partners engaged in that region. And we want limited financial exposure while we can capitalize on our knowledge of the industry," Baker says. "New Songdo City fits that."
The company has entered into discussions with Morgan Stanley Real Estate Fund and Gale International to develop part or all of the planned 10 million square feet of retail that will be part of the $20 billion project south of Seoul. The venture will create a new city with more than 50 million square feet of office space, 30 million square feet of residential space, 5 million square feet of hotel space and 10 million square feet of public space.
The current program calls for one U.S.-style mall to go with an assortment of other kinds of street-level retail. Taubman officials will take part in a ceremonial groundbreaking tomorrow in Korea.
The news signals that Taubman has recovered from a series of blows that hampered the firm's ability to grow. Last year it spent months fending off a hostile takeover bid led by Simon Property Group. Earlier this year it lost management contracts on nine centers it had originally developed when the General Motors Pension Trust sold its ownership stakes in the centers to Mills Corp.
-- David Bodamer