Swire Sells Out Miami Mall Stake to Simon Property Group for $512M

Swire Properties has announced its second exit from a Miami project in less than one month with the Hong Kong-listed developer saying late Friday that it has sold its 75 percent stake in the Brickell City City Centre mall for up to $548.7 million.

In an announcement to the Hong Kong stock exchange, Swire said it had sold its interest in the 496,508 square foot (46,127 square metre) mall to its existing partner, Simon Property Group, with the deal set to boost its supply of cash as its US unit prepares to being construction of the Residences at Mandarin Oriental, Miami project.

“The disposal enabled Swire Properties to realise cash from its investment in the sale interests,” the company said in its statement. “The proceeds from the disposal will be applied towards the funding obligations of Swire Properties US and the general working capital requirements of the Swire Properties Group.

Swire last month backed away from a Miami supertall office project, handing off the 700-799 Brickell Ave site to local builder Melo Group for $211.5 million. Following the transaction Simon is now sole owner of the mall.

Last Piece of Brickell Mega-Project

The Brickell City Centre mall sale sees Swire Properties parting with the last piece of a 5 million square foot complex it developed in Miami’s Brickell financial district at an estimated cost of $1.05 billion for the mixed-use development.

Simon has guaranteed a consideration of $512.6 million for Swire’s stake in the open air mall, with the Hong Kong firm eligible to receive up to $36.1 million in additional consideration if planned improvements to the property are completed without excessive cost overruns, according to the documents.

The sale proceeds would be timely after Swire Properties reported a loss of HK$766 million ($97.6 million) for 2024 due to markdowns on the value of its Hong Kong-focused investment property portfolio. For the first quarter of this year Swire said that rental reversions on office space in its flagship Pacific Place campus in Hong Kong’s Admiralty area saw leasing rates fall by 16 percent.

At the guaranteed consideration, Swire received $1,377 per square foot of gross floor area in the 2016 vintage mall, with Simon set to take over management of the property. In addition to the mall itself, Simon is acquiring parking at Brickell City Centre and certain shared facilities at the development as part of the transaction. 

Last year Swire celebrated the leasing of a 25,000 square foot anchor space in the mall to H&M which brought the property to 100 percent occupancy.

In addition to H&M the four-storey mall is anchored by a Saks Fifth Avenue location and has more than 90 stores representing brands including Apple, Chanel, Coach, Zara and Nike, according to a press release from the companies, with the two parties closing the sale transaction immediately after signing.

Swire’s interest in the property had a net asset value of $574 million as of 31 December with the mall generating net profit after tax last year of $48.5 million. The mall, together with the parking element of the deal was appraised by an independent valuer at $726.4 million, according to the Swire statement, putting the guaranteed element of the stake sale at around a 6 percent discount to that 31 December valuation.

Miami Condos on the Way

Swire announced late last year that it would begin construction of the Residences at Mandarin Oriental, Miami condo project in 2026, with first tower set to yield 228 homes under Jardine Matheson’s Mandarin Oriental brand. The second tower in the project will house a Mandarin Oriental Hotel.

The existing Mandarin Oriental in Miami was closed late last month with the building set to be demolished to make way for the new twin-tower development. 

Swire’s recent Miami disposals come after the company in 2021 sold the East Miami hotel in the Brickell City Centre project for $174 million to a joint venture between funds managed by Honolulu-based Trinity Real Estate Investments and New York-headquartered Certares Real Estate Management. 

With Hong Kong suffering from the early stages of the pandemic in 2020 Swire sold the two office towers in Brickell City Centre to affiliates of Santa Monica-based Northwood Investors for $163 million.