Skip to Content

Simon Property Group Inc SPG

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Simon's Mall Fundamentals Ahead of Expectations in First Quarter; Acquires Retailer Eddie Bauer

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

While mall fundamentals continue to struggle compared with prepandemic levels, no-moat Simon Property Group reported first-quarter results that were ahead of our estimates, leading us to reaffirm our $149 fair value estimate. Occupancy did see a 60-basis-point drop sequentially to 90.9% in the first quarter, though that is better than the typical 100-basis-point drop caused by seasonality in most years and definitely better than our estimate of a 200-basis-point decline. However, re-leasing spreads did fall 13.6% compared with prior rent, worse than our estimate of a 9.7% decline, leading to rent growth of just 0.6%. Still, Simon reported comparable property net operating income decline of just 8.4%, significantly better than our estimate of a 16.4% decline. Combined with fewer rent abatements in the quarter, Simon reported funds from operations of $2.48 in the first quarter, and while that is 30 cents below the same period in 2020 it is 28 cents ahead of our first-quarter estimate and 31 cents ahead of the figure reported in the fourth quarter of 2020. The strong quarter led to management raising 2021 FFO guidance to a range of $9.70 to $9.80, an increase of 13 cents at the midpoint.

Read Full Analysis

Company Profile

Business Description

Simon Property Group is the second- largest real estate investment trust in the United States. Its portfolio includes an interest in 207 properties: 106 traditional malls, 69 premium outlets, 14 Mills centers (a combination of a traditional mall, outlet center, and big-box retailers), four lifestyle centers, and 14 other retail properties. Simon's portfolio averaged $693 in sales per square foot over the past 12 months. The company also owns a 21% interest in Klepierre, a European retail company with investments in shopping centers in 16 countries, and joint venture interests in 29 premium outlets across 11 countries.

Contact
225 West Washington Street
Indianapolis, IN, 46204
T +1 317 636-1600
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 3,300

Related