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Simon Property Group has raised its full-year outlook for real estate funds from operations (FFO), supported by continued leasing demand and higher rents across its retail properties. The company expects annual real estate FFO of USD 13.20 to USD 13.30 per share, while its net income forecast has also been revised. Revenue in the latest quarter rose about 20% to USD 1.79 billion, exceeding market expectations. Occupancy remained at 96%, while base minimum rent per square foot increased 6.3%. However, quarterly FFO per share came in below analysts’ estimates.
Simon Property Group has raised its full-year forecast for real estate funds from operations, citing continued demand for retail space and higher rents across its portfolio. The US-based real estate investment trust has benefited from limited availability of retail space and relatively low levels of new construction, allowing landlords to increase rents while consumer traffic remains firm despite broader economic uncertainty.
The company now expects full-year real estate FFO of USD 13.20 to USD 13.30 per share, compared with its previous range of USD 13.10 to USD 13.25 per share. Its annual net income forecast has also been revised to USD 6.47 to USD 7.47 per share, compared with the earlier guidance of USD 6.61 to USD 6.76 per share.
Simon’s latest results showed continued growth in its operating business. Revenue for the second quarter increased about 20% year-on-year to USD 1.79 billion, compared with analysts’ average estimate of USD 1.61 billion, according to LSEG data.
Occupancy during the quarter stood at 96%, unchanged from the year-earlier period. At the same time, base minimum rent per square foot increased 6.3%, indicating that the company was able to secure higher rental rates even without an increase in overall occupancy.
The improvement in rents comes as retail property supply remains relatively limited. Simon has previously reported steady leasing activity across its US malls and Premium Outlets, with base minimum rent also recording year-on-year growth in earlier quarters. At the end of 2025, occupancy across its US malls and Premium Outlets stood at 96.4%, while base minimum rent had increased 4.7% year-on-year to USD 60.97 per square foot.
The company’s earlier 2026 performance had also shown the importance of leasing to its earnings outlook. In its previous quarterly update, Simon reported 96% occupancy across its US malls and Premium Outlets, while average base minimum rent increased 5.2% year-on-year to USD 61.99 per square foot. It also reported stronger retailer sales per square foot, pointing to continued activity across its retail properties.
Despite the rise in revenue and the higher full-year FFO outlook, Simon’s second-quarter FFO per share came in at USD 3.12, below analysts’ expectation of USD 3.22. This indicates that the stronger revenue performance did not fully translate into quarterly FFO at the level expected by the market.
The company has also continued to increase its dividend. Simon announced a quarterly common stock dividend of USD 2.25 per share for the current quarter, which is USD 0.10, or 4.7%, higher than the dividend paid a year earlier. The company had already raised its quarterly dividend to USD 2.25 earlier in the year from USD 2.20.
Simon’s performance also follows a strong 2025, when it generated USD 4.812 billion in real estate FFO, or USD 12.73 per diluted share, an increase of 4% from the previous year. Its domestic property net operating income increased 4.4%, while portfolio NOI rose 4.7%. The company also executed more than 17 million square feet of leases during the year and completed 23 redevelopment projects.
The retail REIT continues to face risks from softer consumer spending, economic uncertainty and changes in retail demand. However, the latest figures show that strong occupancy and the ability to raise rents are supporting its operating performance. The increase in full-year FFO guidance suggests that Simon expects leasing conditions and rental income to remain supportive through the rest of the year.
Source Reuters
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