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|Shining Ltd.(HK) - DDR Signs Advertising Deals|
Developers Diversified Realty Corp. (DDR), a leading real estate investment trust (REIT), has recently inked advertising and sponsorship deals with AT&T Inc. (T) and The Coca-Cola Company (KO) in Puerto Rico to augment its revenues amid challenging market conditions.
The strategic tie-up would enable AT&T to capitalize on a unique advertising opportunity by branding the signature solar system display owned by Developers Diversified in the highly trafficked area at Plaza del Sol in Bayamon, Puerto Rico. The signs advertising campaign would further give a platform to connect with the tech-savvy consumers of AT&T, generating increased brand awareness.
On the other hand, the agreement would enable Coca-Cola to introduce exclusive vending and snack machines across 15 shopping centers owned by Developers Diversified (DDR) in Puerto Rico. Coca-Cola is currently installing more than 60 vending machines across the island, which would help increase revenues for the company.
Developers Diversified (DDR) had earlier partnered with MasterCard Incorporated (MA) to increase its brand awareness in the Caribbean. The continued sponsorship and signs advertising deals in Puerto Rico have generated annual revenues of over $10 million, and new business development revenue has jumped approximately 80% since the acquisition of the portfolio in 2005.
Developers Diversified (DDR) specializes in the acquisition, ownership, development, redevelopment, leasing and management of shopping centers and business centers. The company owns and manages 630 retail operating (including joint ventures) and development properties spanning approximately 137 million square feet of real estate in 43 states in the U.S., Puerto Rico, Brazil, and Canada.
DDR continues to minimize ground-up development spending in its domestic portfolio and allocates capital to the lease-up of existing projects as it believes there may be opportunities to redevelop many of its existing assets.
These redevelopments should create a future growth opportunity of the company's existing assets as well as create future value without the level of risk or capital required for a new development. Consequently, we maintain our Neutral rating on DDR with a Zacks #3 Rank, which translates into a short-term "Hold" recommendation.
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