Competitive Rivalry

Outlet-center retail competes with malls, open-air centers, and e-commerce, keeping tenant demand and rent growth more constrained than in necessity-based formats.

SKT’s outlet specialization supports differentiated traffic, but peers in premium and mixed-use retail still compete for the same brand tenants and consumer spending.

Occupancy and leasing spreads are more cyclical than grocery-anchored peers, so rivalry more directly pressures renewal pricing and margin stability.

Threat Of New Entrants

High capital intensity, long permitting timelines, and limited suitable sites make new outlet-center supply difficult, protecting incumbent rent economics versus smaller retail formats.

Established landlord relationships and tenant curation requirements raise barriers for new entrants, while peers with larger portfolios can spread development risk more efficiently.

Because outlet centers are a niche format, new supply tends to be selective, limiting direct competitive encroachment on SKT’s existing assets.

Bargaining Power Of Suppliers

Construction and redevelopment suppliers can influence project costs, but this pressure is broadly shared across retail REIT peers rather than uniquely impairing SKT.

Debt capital is a meaningful supplier input for REITs, and higher rates compress spreads across the sector, though SKT is not structurally worse positioned than peers.

Tenant mix and brand relationships reduce dependence on any single supplier, but limited alternative financing and construction capacity still constrain margin flexibility.

Bargaining Power Of Buyers

Retail tenants have meaningful bargaining power because they can shift toward competing centers or direct-to-consumer channels, limiting SKT’s rent escalation versus stronger-format peers.

Large national brands negotiate aggressively on occupancy costs, and outlet landlords must preserve traffic, which caps pricing power more than in necessity retail.

Consumers also act as indirect buyers, and weaker discretionary spending can quickly pressure tenant sales, reducing landlord leverage across the outlet sector.

Threat Of Substitutes

E-commerce remains the main substitute for outlet shopping, and its convenience keeps pressure on physical traffic and tenant sales across the category.

Off-price chains, brand websites, and alternative retail formats substitute for outlet value propositions, limiting SKT’s ability to raise rents purely on location scarcity.

Compared with grocery-anchored or service-heavy retail peers, outlet centers face a more direct substitution risk because discretionary apparel demand is easier to redirect.

Overall Score

SKT benefits from high barriers to new outlet supply, but rivalry, tenant bargaining power, and substitution from e-commerce keep pricing power and margin expansion structurally constrained versus stronger retail peers.