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• Simon Property Group raised the lower end of its annual FFO guidance to between USD 13.10 and USD 13.25 per share, supported by stable leasing demand and higher rental income across its malls and shopping centres.
• The company lowered its annual net income forecast amid concerns around macroeconomic uncertainty, softer consumer spending and continued growth of e-commerce platforms, despite revenue beating market estimates during the first quarter.
• Quarterly occupancy improved to 96% from 95.9% a year earlier, while base minimum rent per square foot increased 5.2% year-on-year to USD 61.99, reflecting continued strength in its retail property portfolio.
US-based retail real estate investment trust Simon Property Group has increased the lower end of its annual real estate funds from operations (FFO) guidance, supported by continued leasing demand across its malls and shopping centres. Advertisement
The company now expects annual FFO between USD 13.10 and USD 13.25 per share, compared to its earlier guidance of USD 13 to USD 13.25 per share. The revised outlook reflects stable leasing activity and stronger rental income growth across its retail portfolio.
At the same time, the company reduced its annual net income forecast to between USD 6.61 and USD 6.67 per share, lower than its earlier projection of USD 6.87 to USD 7.12 per share. According to data compiled by LSEG, the midpoint of the revised estimate remained broadly in line with analysts’ expectations of around USD 6.65 per share.
The retail REIT has continued to benefit from higher rents due to limited availability of premium retail space and sustained demand from brands looking for physical store presence in major shopping destinations. However, concerns around macroeconomic conditions, weaker consumer spending and continued growth of e-commerce platforms remain key risks for the sector.
For the quarter ended March 31, the company reported FFO of USD 2.91 per share, up 9% from the previous year. However, the figure came below analysts’ expectations of USD 3.03 per share.
Quarterly revenue stood at USD 1.76 billion, surpassing market estimates of USD 1.51 billion. Occupancy across the portfolio improved slightly to 96% from 95.9% a year earlier, indicating stable tenant demand despite economic pressure on the retail sector.
Base minimum rent per square foot increased 5.2% year-on-year to USD 61.99, reflecting the company’s ability to maintain pricing strength across its retail assets.
Earlier this year, Simon Property appointed its Chief Operating Officer Eli Simon as the new chief executive officer following the death of longtime CEO David Simon after a battle with cancer.
Simon Property remains one of the largest mall operators in the United States, with a portfolio that includes premium shopping malls, outlet centres and mixed-use retail properties. Over the past few years, the company has focused on improving occupancy, increasing tenant quality and expanding experiential retail offerings as shopping habits continue to evolve.
Source Reuters
5th Jun, 2025
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