Fitch: Simon Property Launch of Simon Venture Group A Positive Move

Simon Property Group's introduction of Simon Venture Group, a new business that will invest in technology companies targeting retail innovation with the goal of heightening the shopping experience, is a step in the right direction, according to Fitch Ratings.
Steven Marks, Fitch

Steven Marks, Fitch

The shopping center business isn’t one dimensional, and Simon Property Group Inc. knows it. The retail real estate giant has just introduced Simon Venture Group, a new business that will invest in technology companies targeting retail innovation with the goal of heightening the shopping experience.

Simon Venture Group will make Seed to Series C+ investments in technology firms, leaving the door open to direct and indirect investment opportunities in early-stage to high-growth companies. It’s a move that many analysts look upon favorably.

“We generally view it as a positive in that Simon has recognized that shopping behaviors have changed due primarily to the increase in online shopping, and thus, looking into and investing in the concept of retail innovations appear to be very prudent on their part,” Steven Marks, managing director with Fitch Ratings, told Commercial Property Executive. “It’s an acknowledgement of the trend of online shopping, and ways to improve and enhance the overall shopper experience is certainly critical to their business.”

Simon has tapped J. Skyler Fernandes, formerly a partner with multi-stage venture capital fund Centripetal Capital Partners, to head Simon Venture Group. Fernandes brings to the table an expertise in consumer Internet, retail and high-tech with commercial applications.

It remains to be seen if the new tech investment vehicle will prove the success that Simon anticipates it will be, and considering the prominence of the Simon name in the retail real estate arena, everyone will certainly be watching–closely. Imitating, however, may be a different story.

“Given human nature, whatever comes out of that entity, there will ultimately be imitators but in terms of other retail companies establishing ventures, it’s too early to tell what other companies are thinking,” Marks added.

The launch of Simon Venture Group comes on the heels of another new endeavor for Simon: the spinoff of its strip center business and smaller enclosed malls into SpinCo, an independent publicly traded REIT. Simon announced plans for SpinCo in December 2013.