• Real Estate FFO: $3.05 per share in Q3, up 4.8% from $2.91 last year.

• Funds from Operations: $1.07 billion or $2.84 per share, down from $1.2 billion or $3.20 per share last year.

• Domestic NOI: Increased 5.4% year-over-year.

• Portfolio NOI: Increased 5% for the quarter.

• Malls and Outlet Occupancy: 96.2%, up 1% from last year.

• The Mills Occupancy: 98.6% at the end of the quarter.

• Average Base Minimum Rent: Malls and outlets up 2.3% year-over-year; The Mills up 4.5% year-over-year.

• Leases Signed: Approximately 1,200 leases for 4 million square feet in Q3.

• Retailer Sales per Square Foot: $737, up approximately 1% year-over-year.

• Occupancy Cost: 12.8% at the end of the quarter.

• Dividend: Increased to $2.10 per share, a 10.5% year-over-year increase.

• Liquidity: Approximately $11.1 billion at the end of the quarter.

• Guidance: Affirmed range of $12.80 to $12.90 per share.

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Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Simon Property Group Inc (NYSE:SPG) reported a 4.8% growth in real estate FFO per share, reaching $3.05 compared to $2.91 in the prior year.

• The company achieved a high occupancy rate of 96.2% for malls and outlets, with the Mills occupancy at 98.6%.

• Leasing momentum is strong, with approximately 1,200 leases signed for 4 million square feet in the third quarter.

• Simon Property Group Inc (NYSE:SPG) increased its dividend to $2.10 per share, marking a 10.5% year-over-year increase.

• The company has a robust development and redevelopment pipeline, with projects underway both domestically and internationally, valued at $1.3 billion at a blended yield of 8%.

Negative Points

• Funds from operations decreased to $1.07 billion or $2.84 per share from $1.2 billion or $3.20 per share last year.

• The company experienced a non-cash net loss of $0.13 per share due to fair value adjustments on Klepierre exchangeable bonds.

• Operational performance at SPARC brands underperformed due to reduced discretionary spending by lower-income consumers.

• The occupancy cost at the end of the quarter was 12.8%, indicating potential pressure on profitability.

• Simon Property Group Inc (NYSE:SPG) faces challenges with inflationary impacts and high construction costs, which have increased by 60% from pre-pandemic levels.

Q & A Highlights

Q: How is Simon Property Group addressing the lease expiration schedule and pricing power given the strong demand for retail space? A: David Simon, CEO, explained that the focus is on improving the merchandise mix rather than just maximizing rent. The company is undergoing significant re-merchandising to attract better retailers, including restaurants and other tenants, to enhance the overall property. Despite increased construction costs, Simon Property Group is one of the few that can build and overcome these challenges, focusing on making properties better rather than just increasing rent per square foot.