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Will Amazon Convert Dead Malls Into Fulfilment Centres?

According to The Wall Street Journal, Amazon has been in talks with the US commercial property owner Simon Property Group about converting certain malls into fulfilment centres for the e-commerce giant.

Simon Property Group is the largest mall owner in the US.

“For Amazon, more fulfillment centers near residential areas would speed up the crucial last mile of delivery. For Simon, turning over what was once prime mall space to fulfillment centers shows it would be willing to relingquish an essential way to bring in more mall traffic to secure a steady tenant,” the Wall Street Journal wrote.

While shopping malls across the globe have struggled during the COVID-19 pandemic, e-commerce has taken off. In Q2 Amazon’s net sales rose by 40% year-on-year, reaching $88.9 billion.

In the US, a number of major retailers that rely on brick-and-mortar stores, including JCPenny and Nieman Marcus, filed for bankruptcy.

In Australia, commercial property owners have struggled to regain foot traffic, and they have also been put under pressure by retailers asking for lower rent. Many retailers have called for a flexible rental structure that can go up or down in line with profit.

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