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Simon Property Group Inc SPG

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Morningstar’s Analysis

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Economic Moat


Capital Allocation


Taubman Acquisition and Retail Investments Help Simon Produce Strong Q2 Cash Flows

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

No-moat Simon Property Group beat our expectations for the second quarter, leading us to reaffirm our $149 fair value estimate. Occupancy started to recover in the June quarter, increasing 90 basis points sequentially to 91.8%, well ahead of our estimate for occupancy to fall to 89.5%. However, re-leasing spreads came in worse than we anticipated with a 21.8% decline in new lease terms compared with our estimate of a 10.1% decline, which led to average base rents falling 1.1%.

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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.

225 West Washington Street
Indianapolis, IN, 46204
T +1 317 636-1600
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 3,300