Simon declares ‘excellent’ quarter despite slight dip in income
Simon Property Group reported a 5% drop in net income to $527 million for the second quarter, yet declared positive results based on other measures. Total portfolio net operating income, which tracks comparable property and new property growth, grew 7.4% over second quarter 2015 and growth in comparable funds from operations rose 9.1%.
The Simon board declared a 6.5% increase in its stock dividend for the quarter and raised its guidance for full-year 2016 net income to be within a range of $6.04 to $6.12 per diluted share.
"This was an excellent quarter for Simon Property Group, with strong financial and operational performance, the opening of a new outlet center, the groundbreaking for our second Premium Outlet in Malaysia, and the acquisition of The Shops at Crystals, a highly productive center," said Chairman and CEO David Simon in a statement.
Simon completed the $1.1 billion purchase of The Shops at Crystals (above) on the Las Vegas strip — a 50/50 joint venture with Invesco Real Estate — in April. During the quarter it also completed the redevelopment of its Stanford Shopping Center in Palo Alto, California, and opened a 355,000-sq.-ft. outlet center in Columbus, Ohio.
Two other big Simon projects set to open in 2016 are the 500,000-sq.-ft. retail component of Brickell City Centre in Miami and the 392,000-sq.-ft. Clarksburg Premium Outlets in Maryland. The $1.05 billion Brickell mixed-use project, which covers 4.9 million sq. ft. in its entirety, is being developed by Swire Properties in a retail partnership with Simon Malls and Whitman Family Development. The project is located in Brickell, Miami’s financial district.
Occupancy rates at Simon properties held steady at about 96% during the quarter. Base minimum rents rose from $48.07 to $50.43.
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