Simon Property Group, Inc. SPG, a retail real estate investment trust (“REIT”), reported fourth-quarter 2016 adjusted funds from operations (“FFO”) of $2.91 per share, up from the year-ago quarter tally of $2.73. The Zacks Consensus Estimate for the quarter was $2.51. Growth in operating income aided the results.
For full-year 2016, the company reported adjusted FFO per share of $10.87, up from the year-ago figure of $10.19.
During the quarter, Simon Property posted revenues of $1.43 billion, beating the Zacks Consensus Estimate of $1.42 billion. The year-ago quarter’s revenues were $1.38 billion.
For full-year 2016, the company reported revenues of $5.55 billion, up from 2015- figure of $5.27 billion.
Quarter in Detail
For the U.S. Malls and Premium Outlets portfolio, occupancy rose 70 basis points year over year to 96.8% at the end of the fourth quarter. Base minimum rent per square feet rose 5.4% year over year to $51.59, while leasing spread for the trailing 12-months rose 12.7% to $7.82.Total net operating income grew 5.6% year over year.
During the quarter, Simon Property opened two major new development projects – Clarksburg Premium Outlets, in Clarksburg, MD and the Brickell City Center in Miami, FL.
At the end of the quarter, Simon Property had redevelopment and expansion projects in progress at 29 properties across the U.S., Canada and Europe.
Construction is also in progress in various redevelopment and expansion projects including The Westchester, The Galleria in Houston, La Plaza Mall, The Shops at Riverside, Woodbury Common Premium Outlets, Allen Premium Outlets and Toronto Premium Outlets.
The company exited the quarter with cash and cash equivalents of $560.1 million compared with $701.1 million at the end of fourth-quarter 2015.
2017 Outlook
Simon Property provided FFO per share guidance for 2017 and expects it to be in the range $11.45–$11.55.
Dividend Update
Simon Property announced a quarterly dividend of $1.75 per share. This marks a 6.1% sequential and 9.4% year-over-year increase. The new dividend will be paid on Feb 28 to stockholders on record as of Feb 14.
Our Viewpoint
Strong financial as well as operational performance is expected to drive the company’s growth, going forward. The gradually recovering U.S. economy and improvement in the spending power of the customers will further aid the company’s development.
Currently, Simon Property carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
Simon Property Group, Inc. Price, Consensus and EPS Surprise | Simon Property Group, Inc. Quote
We now look forward to the earnings releases of The Macerich Company MAC, Highwoods Properties, Inc. HIW and Liberty Property Trust LPT which are expected next week.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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