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US$5b New Jersey mall bucks retail nightmare, nears 90% lease rate

New York

WHEN shoppers visit the long-awaited American Dream mega-mall in New Jersey this spring, they can expect to see it crammed with stores, restaurants and entertainment activities.

But it didn't always seem that way. Developers have leased almost 90 per cent of its available 3.3 million square feet, a figure which rises to nearly 100 per cent when leases under negotiation are included, according to a filing.

In particular, all retail anchor stores have been spoken for - which is critical for malls because those locations, typically department stores, are key in driving foot traffic.

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That the US$5 billion behemoth is close to full capacity appears to buck the slow demise of physical retail, where shoppers have been lured away by the convenience of online options.

Fewer than half of US malls are expected to survive ongoing store closings, according to Bloomberg Intelligence, and the American Dream project itself has also had its fair share of problems.

More than 17 years in the making, the project was hampered by a tortured construction process with many setbacks.

But American Dream has said it can beat the odds because of its attractions - counting a Nickelodeon Universe park, an ice skating rink and a ski slope among them - and its accessibility to New York City.

It seems to have paid off, with all of the store's bigger than 20,000 square feet now leased, and about 70 per cent of smaller ones, the filing showed.

The mall, owned by Triple Five Group of Canada, opened partially in October. The retail side of the mall will start opening in March with some 450 businesses. BLOOMBERG