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Simon beats expectations, boosts dividend, outlook

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Simon Property Group Inc., the largest U.S. shopping-mall owner, raised its quarterly dividend and its forecast for full-year funds from operations as its tenants benefit from an increase in consumer spending.

FFO, which gauges a property company’s ability to generate cash, climbed in the third quarter to $720.1 million, or $1.99 a share, from $606.2 million, or $1.71, a year earlier, the real estate investment trust said Thursday in a statement. The average estimate of 21 analysts in a Bloomberg survey was $1.92 a share.

Demand for space at regional malls is rising, helping to boost revenue for Indianapolis-based Simon. U.S. retail sales advanced 1.1 percent in September following a revised 1.2 percent increase in August, according to data from the Commerce Department. The company also is benefiting from its outlet centers, said Craig Guttenplan, a REIT analyst at CreditSights Inc. in London. Those properties are a top area of expansion.

“Outlet malls continue to do well,” Guttenplan said in a telephone interview before Simon announced its earnings. “Regional malls are slightly positive and outlets are more positive.”

The company boosted its quarterly dividend to $1.10 a share from $1.05. It estimates FFO for the full year of $7.80 to $7.85 a share, up from its previous forecast of $7.60 to $7.70.

Simon also said it sold its investment this week in U.K. property companies Capital Shopping Centres Group Plc and Capital & Counties Properties Plc for proceeds of $327 million.

Revenue for the third quarter increased 14 percent to $1.23 billion. U.S. occupancy climbed to 94.6 percent from 93.8 percent. The base minimum rent in the quarter was $40.33 a square foot, up from $38.84 a year earlier. Tenant sales per square foot rose 9.3 percent to $562.

The results were released before the start of regular U.S. trading. Simon rose 0.1 percent to $151.17 yesterday. Its shares have advanced 17 percent this year, compared with a 12 percent gain in the Bloomberg REIT Index.
 

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  • Good point, Bill.
    In addition to those tax abatements, Simon Property Group receives a $10 million check annually to convince it to keep the Pacers here, it get its choice of DT for where they wish to build their HQ, and the management is allowed to take its sweet precious time in finding a replacement tenant for the Nordstrom at Circle Centre. Gosh, it must be wonderful for Simon to have a host city as willing as Indianapolis is to grab its ankles for them!
  • Great Timing
    That's wonderful news coming on the heals of special tax abatements just announced for Simon 's malls here in Indianapolis. They'll decline those abatements now, right?
  • Good news, but what's next?
    That's great news, but what's going on with the Nordstrom vacancy at Circle Centre?

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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