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Despite waning consumer confidence, trade wars and economic uncertainties, Simon Property Group, the nation’s largest operator and owner of shopping centers, came out looking good last quarter.
Funds from operations, a standard financial yardstick at real estate companies, reached $1.1 billion, or $2.95 per diluted share, for the first quarter, compared with $1.09 billion, or $2.91 per diluted share in the prior year.
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Domestic property net operating income (NOI) for the three months ended March 31 increased 3.4 percent and portfolio NOI increased 3.6 percent compared to the prior year period.
Occupancy as of March 31 was 95.9 percent, up from 95.5 percent a year earlier. Base minimum rent per square foot stood at $58.92, a year-over-year increase of 2.4 percent.
Reported retailer sales per square foot was $733 for the 12 months ended March 31, versus $745 a year earlier. The decline was attributed to a shift in Easter timing, weather conditions impacting traffic, West Coast fires, and less tourism, particularly from Canadian and Mexican shoppers. Tourism to the U.S. has declined due, in part, to economic concerns and the strength of the dollar against other currencies.
Simon reaffirmed its outlook for real estate FFO of $12.40 to $12.65 per diluted share for 2025.
On Jan. 30, the company completed the acquisition of two luxury outlets in Italy — The Mall Firenze in Leccio, near Florence, and The Mall Sanremo, on the Italian Riviera.
Last March, Simon’s 50-percent-owned Jakarta Premium Outlets in Tangerang, Indonesia, opened with 302,000 square feet featuring global and local brands and international dining.
“Our first-quarter results underscore the strength of our business,” David Simon, chairman, chief executive officer and president, said in a statement. “We delivered strong financial and operational performance and enhanced our portfolio with the acquisition of The Mall Luxury Outlets in Italy and the successful opening of Jakarta Premium Outlets in Indonesia. As macroeconomic conditions continue to shift, we are well-positioned with a fortress balance sheet and a proven track record of navigating successfully through a wide range of economic cycles.”
Simon’s board also declared a quarterly common stock dividend of $2.10 for the second quarter. This is an increase of 10 cents, or 5 percent year-over-year.