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SPG has a long history of success- ful development projects — new projects as well as expansions and renovations — which have contributed to our growth. Our development and redevelopment program in the U.S. and abroad is accelerating. We will only build where demand exceeds sup- ply and we can do so profitably. The good news for SPG is that there is very little supply coming onboard over the next few years, which will only make our real estate more valuable. 

Our focus for new ground up develop- ment is in our Premium Outlets platform. We currently have three projects under construction with opening dates in 2012 and 2013 — located in New Hampshire, Texas and Korea. Other identified projects, with start dates planned in 2012, are lo- cated in Phoenix, St. Louis, Tampa, Toronto and Japan. We will begin construction in Tempe (Phoenix) and Shisui (Japan) later this month. 

We invest capital in our existing properties to make them the best they can be for their marketplace. We have more than 20 renovation and expansion projects under construction in the U.S. with completion dates in 2012 and 2013. The cost of these projects is approximately $700 million (our share) and the expected stabilized return on our invested capital is 10%. We have also identified 16 additional expansions and renovations where we expect to begin construction in 2012 and 2013. 

Based upon our robust pipeline of development and redevelopment projects, we currently expect our share of capital spend to approximate $1 billion annually for 2012 through 2014, and believe we are building the great projects of tomorrow where the retailers will want to aggregate, creating the critical mass required for a successful retail project. 

Now let me touch on some notable 2011 activities. 

## Acquisitions 

We continued to demonstrate our ability to strategically invest capital in 2011 with $1.8 billion of acquisitions. The most significant of these transactions was the August acquisition of a controlling interest in King of Prussia – The Plaza and The Court. Our ownership interest increased from 12% to 96%, and we have the ability to acquire the remaining 4% in the fall of 2013. 

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King of Prussia is one of the truly iconic shopping destinations in the U.S., serving the greater Philadelphia market. It is one of the country’s largest shopping centers at 2.4 million square feet and also one of the country’s most productive centers, generating total annual retail sales in excess of $850 million. 

The King of Prussia acquisition was immediately accretive to our earnings and the property has excellent growth prospects. A major redevelopment of the center is currently underway, converting a former department store into 100,000 square feet of specialty stores. In November, we announced an additional multi-level expansion connecting the five-anchor Plaza and the two-anchor Court. The 140,000 square foot expansion will include approximately 40 exciting new retailers, several restaurants and an upscale dining pavilion. 

## Development 

In 2011, we opened two new assets: Paju Premium Outlets, our second Premium Outlet in Korea, located approximately 50 minutes northwest of downtown Seoul, and Johor Premium Outlets located in Malaysia, our first Premium Outlet in Southeast Asia, less than an hour’s drive from Singapore. Both centers are fully leased and performing well. Importantly, we once again demonstrated our ability to successfully export our know-how to international markets for the benefit of our stockholders. 

Several redevelopment projects were completed during the year including: 

  Expansions at Ami Premium Outlets (Japan), Las Vegas Premium Outlets – South, Pheasant Lane Mall (Nashua, New Hampshire) and Tosu Premium Outlets (Japan), 

  Renovations of Coddingtown Mall (Santa Rosa, California), Fashion Valley (San Diego, California), Great Lakes Mall (Cleveland, Ohio), McCain Mall (Little Rock, Arkansas) and Town Center at Boca Raton (Boca Raton, Florida) , and 

 The opening of 38 new anchors and big box tenants, aggregating 1.7 million square feet of activity across all of our U.S. platforms. 

Our leasing activity of 17 million square feet enhanced our merchandise mix and increased our rents and occupancy. 

## Balance Sheet Strength and Capital Market Transactions 

Our strong access to capital was demon- strated again in 2011 by the sale of $1.2 billion of unsecured notes in November at a weighted average interest rate of 3.6% and weighted average term of 8 years. We also completed a new $4.0 billion revolving credit facility during the year that can be increased to $5.0 billion. 

Our strategy of pruning the portfolio and recycling capital continued with the disposition of interests in 59 properties for approximately $930 million. 

