Uruguay mall king eyes $60 million retail push

Bloomberg

Uruguay’s biggest commercial real estate developer wants to take its success in malls geared for the middle class to low-income neighbourhoods in the capital, Montevideo.
Estudio Luis E Lecueder is studying building two shopping centres in northern Montevideo, senior partner Carlos Lecueder, 66, said in an interview. The firm will probably start work on those projects when its Plaza Italia mall nears completion in 2020, he said. Each $30 million shopping centre would be financed through equity from private investors, bank loans and the money retailers pay to open stores in the shopping centres.
“The north is underserved in terms of retail,” Lecueder said. “The opportunity could be even greater taking into account that purchasing power has been rising year after year.”
Uruguayan wages have grown faster than inflation every year since 2004 as the economy heads into a 16th year of growth. Lecueder, known as the father of Uruguay’s shopping centre industry, has built a real estate portfolio that includes minority stakes in eight malls, a World Trade Center-branded free zone, and a Hilton Garden Inn hotel.
Investors including Lecueder have discussed modernising the ownership structure of those projects, including the option of creating a real estate investment trust, but so far haven’t approved any changes, he said.
Estudio Luis E Lecueder is building its ninth shopping center and a second WTC Montevideo Free Zone tower. He’s also making a big bet on the summer resort town of Punta del Este on the Atlantic coast. The investments will cost about $117 million.
Lecueder is building a 25 floor WTC office tower in Punta del Este, with the hope that some of the 824,000 tourists who visited last year will come back in the off season if they could work from a modern office.
“From December to March everything happens and from March to December nothing happens,’’ he said. “We think that developing offices could help Punta del Este work year round.”