Tanger Outlets this week said that in January, footfall at its U.S. shopping centers returned to pre-pandemic levels, thanks to their outdoor orientation and value proposition. In the fourth quarter, traffic was at about 90% of the prior-year level, rising to about 96% last month.
The mall REIT also said in a press release that fourth quarter rent collection improved to 95% of billed rent by the end of January and that it collected 90% of rent due in January that had been deferred last year as retailers struggled.
Fourth quarter net income available to shareholders reached $260,000, compared to a net loss of $12.1 million in the year-ago period, as funds from operations available to common shareholders fell to $52.7 million from $57.5 million a year ago. For the full year, net loss available to common shareholders was $37 million, down from net income of $86.5 million the year before as FFO fell to $154.1 million from $221.7 million the previous year.
Consumers increasingly prefer shopping at outdoor centers, pandemic or not, and open-air centers have had an advantage over enclosed malls since the disease outbreak last year.
Foot traffic to malls was already improving late in the summer despite the pandemic, with outdoor malls faring best even then, according to research from S&P Global Market Intelligence. The contrast was also stark over the holidays, with footfall declines over the Black Friday shopping weekend worse at enclosed malls, which saw an overall decline of 38.3%, according to a study from foot traffic analytics firm Placer.ai.
Reluctance to shop indoors remains as the pandemic continues. In a survey this month, Coresight Research found that consumers remain leery of malls because of the virus, with nearly a quarter of respondents indicating that they'll continue shopping more online and less in stores even after the pandemic is over.
At a time when already financially challenged consumers have taken further hits during the pandemic, outlet malls, like off-price retailers, also have the advantage of populating their centers with stores offering discounted merchandise. Tanger Outlets reinstated its dividend last month, which is necessary to remain compliant with REIT rules.
"Our business continues to improve, with the consumer embracing open-air outlet centers as a preferred venue for shopping and entertainment," CEO Stephen Yalof said in a statement. "Outlets are an important component of the omnichannel retail strategy, given the low cost structure and access to an incremental consumer that is both value-oriented and aspirational," Yalof added.
Yalof, previously chief operating officer and before that CEO of Simon Property Group's outlet division, took over as chief executive last month, replacing Steven Tanger.