US mall operator Simon Property Group is actively engaged in backing promising startups that could become tenants in its own shopping centres, the company's CEO David Simon told delegates at the annual ICSC conference in Milan on Monday.
While the internet and ecommerce are presenting formidable challenges to brick-and-mortar landlords, the news is not all bad, Simon said. Indeed, a wave of new retailers is emerging to replace some of the traditional groups of tenants like department store chains, bookstores and record shops, he added.
'The good news sits in the creation of an entrepreneurial class that didn't exist a decade ago. Generally these businesses start on the internet, but once they have legs a lot of them are opening up physical stores to complement their brand. We see that trend continuing very aggressively and we're following some of these startups and venturing them,' he said.
A 'great revolution' is currently taking place in the food and beverage sector in particular, he said. 'In the US we’re seeing a great wave of entrepreneurs in the food and restaurant industry…We're seeing more startups in that industry which is offsetting some of the negatives. A new wave of food and beverage brands is coming.'
At present, Simon Property focuses on retail venture capital startups in the US, but the group has 'no edicts', the company's CEO told the conference. 'It's not like we will not do this in Europe, but we first want to see if this is successful in the US. We are hopeful that some of the companies we invest in will go to Europe or other places.'
Simon conceded that the group was in fact already tracking a 'unique drinks' company in the UK that is aiming to grow in the US, but declined to provide further details.
