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Room To Grow

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Front Page: Room to grow

Posted: Friday, March 9, 2007 - 03:26 PM

By Gabriel Parra Blessing of Caribbean Business

Puerto Rico is seriously undermalled. That is, the supply of retail space in shopping centers and mall space per person is lower on the island than the market demands. According to statistics compiled and provided by Downtown Development Corp. (DDC), a Puerto Rico real-estate development and leasing company, the island has some 24 million square feet of total retail space in shopping centers. Divided by four million people, that is about six square feet of retail shopping center and mall space per person.

According to DDC, the market demands at least 10 square feet of shopping center retail space per person. In other words, the supply of retail space is currently meeting only 60% of the demand, and conversely, should grow some 66% in order to get to the optimal 10 square feet per person, for a total of 40 million square feet.

In contrast, Florida has 28 square feet per person of retail shopping center space. That means Florida has nearly five times as much retail shopping center space as Puerto Rico. Even accounting for obvious differences in per capita purchasing power and the disparity in per capita incomes, this alone lends credence to the fact that, contrary to conventional wisdom and arguments proposed by those who have an interest in erecting barriers to entry, there should be a lot more shopping center space in Puerto Rico, not less.

Ricardo Rivera Cardona, secretary of the Department of Economic Development & Commerce, agrees.

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What do you think about having more shopping centers or malls? It's amazing how much need there is for more retail but it would be better if the development were to be in the form of mixed use type neighborhoods with residential units and offices above instead of malls or shopping centers?

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