Simon raises dividend after increase in net income

Listen to this article

Simon Property Group, the largest owner of shopping malls in the country, is raising its dividend to shareholders following an increase in net income. 

The Indianapolis-based real estate investment trust, which owns more than 230 malls and shopping centers worldwide, including Roosevelt Field, Walt Whitman Shops and Smith Haven Mall on Long Island, reported net income of $1.225 billion or $3.76 per diluted share for the first six months of the year, according to its latest financial report. By comparison, Simon reported net income of $938.2 million or $2.87 per share in the first half of 2023. 

The REIT’s board of directors announced Monday it will give a quarterly common stock dividend of $2.05 for the third quarter of 2024, which is an increase of $0.15, or 7.9% year-over-year. 

“We are pleased with our financial and operational performance in the second quarter,” David Simon, Simon’s chairman, CEO and president, said in a company statement.  “We continue to invest in our retail real estate platforms with transformative redevelopments, including the addition of mixed-use components, and selective new developments…Today, we once again raised our quarterly dividend and are increasing the mid-point of our full-year 2024 guidance.” 

The company estimates net income to be within a range of $7.37 to $7.47 per diluted share and funds from operation (FFO) to be within a range of $12.80 to $12.90 per diluted share for the year ending Dec. 31.    

The occupancy rate at Simon properties at the end of the second quarter was 95.6%, a 0.9% increase compared to 94.7% at the end of Q2 2023. The base minimum rent per square foot was $57.94 at the end of the first half of the year, 3% higher than the minimum rent per square foot of $56.27 at the midpoint of 2023. Simon reported that retailer sales was $741 per square foot for the trailing 12 months that ended June 30, 2024. 

During the first six months, the REIT completed 10 non-recourse mortgage loans totaling about $1.1 billion, of which Simon’s share was $544 million. The weighted average interest rate on the loans was 6.36%. 

As of June 30, Simon had about $11.2 billion of liquidity, consisting of $3.1 billion of cash on hand, including its share of joint venture cash, and $8.1 billion of available capacity under its revolving credit facilities, according to the company’s report.