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Shoppers stroll through the Toronto Eaton Center on Jan. 28, 2014.
Shoppers stroll through the Toronto Eaton Center on Jan. 28, 2014.
(Fernando Morales/The Globe and Mail)

The Internet hasn't killed shopping mall REITs (yet)

Perhaps you laughed at the prospect of Amazon.com Inc. delivering parcels with drones. But the online retailer’s chief executive, Jeff Bezos, nonetheless added one more reason to ponder the end of shopping malls when he floated the drone idea in December.

While shoppers may not worry about a transition away from malls as e-commerce rises, investors in real estate investment trusts should: If tumbleweed replaces tenants, distribution streams will vanish. So far, shopping mall REITs have shown little concern over the threat – recent weakness seems more related to positioning away from interest-rate sensitive investments – but could things change?