"We are consolidating our growth strategy in the Andean region thanks to a large-scale platform and a business model focused on experience. This allows us to be the preferred partner for high-value global brands, such as H&M and IKEA," says Derek Schwietzer, CFO of the firm.

Chilean shopping center chain Mallplaza hopes to strengthen its regional presence by completing the acquisition of Falabella in Peru in the coming months, where it hopes to expand its leasable area by 100,000 square meters in five years, as well as consolidating its presence in Chile and Colombia.

In Chile, the Falabella group unit plans to grow by 125,000 square meters of leasable areas (GLA) in five years, which will "further strengthen our Tier A assets," Derek Schwietzer Tang, Mallplaza's Finance and Administration Manager, said on Friday.

"Tier A" assets are urban shopping centres with a dominant position in large markets and high growth potential.

In Colombia, the firm has five urban centers and hopes to boost "the deployment of the Mallplaza Cali value proposition," with a 30% increase in commercial space in the country.

"We are consolidating our growth strategy in the Andean region thanks to a large-scale platform and a business model focused on experience. This allows us to be the preferred partner for high-value global brands, such as H&M and IKEA," said Schwietzer, an economist at Michigan State University who joined Mall Plaza in 2023.

"Our urban centers today have land that still gives us opportunities to transform it and add GLA. Therefore, brownfield growth will be very important in the next five years both in Peru and in Chile," he said.

The executive specified that the growth of 225,000 square meters of GLA in Chile and Peru, which represents more than a 10% increase in the GLA that the firm currently has, is added to a "landbank" (land reserve) of 550,000 square meters that the company has in Chile.

"This allows us to expand our urban centers or explore new uses, such as the development of multi-family housing," he said.

FALABELLA PERU

In April, Mallplaza signed an agreement to acquire the department store assets in Peru from Falabella, in a transaction valued at US$848 million.

"We expect to launch a takeover bid in the last quarter of the year and conclude the acquisition of Falabella Peru," the executive said.

"This transaction would allow us to consolidate our position as the second largest shopping centre operator in that country in terms of GLA square metres, in addition to strengthening our position as the main asset platform in the Andean region," he said.

Schwietzer said the operation involved a combination of debt, equity and cash financing. In April, it issued corporate bonds for the equivalent of US$122 million, the demand for which more than tripled the amount offered.

In August, the company closed a capital increase process that allowed it to raise US$325 million.

The firm has indicated that, following the changes generated by the pandemic, it has begun a reconversion of large stores, giving space not only to brands, but also to entertainment, gastronomy and public services proposals.