Simon Property Group (SPG) Q2 2024 earnings summary

Executive summary

• Achieved record real estate NOI and strong financial and operational performance in Q2 2024, driven by increased leasing, occupancy, shopper traffic, and retail sales volumes.

• Diluted EPS for the first six months of 2024 rose to $3.76, up $0.89 year-over-year, including a $414.8M pre-tax gain from the sale of Authentic Brands Group.

• Portfolio NOI increased 4.4% year-over-year, with U.S. Malls and Premium Outlets occupancy at 95.6% and average base minimum rent up 3.0%.

• Over 1,400 leases signed for 4.8 million sq ft in Q2, with 6.6M sq ft of new and renewal leases signed in H1 2024.

• Ongoing investment in redevelopment and new developments, including Tulsa Premium Outlets opening at 100% leased.

Financial highlights

• Q2 2024 FFO was $1.09B ($2.90/share), up from $2.88/share last year; six-month FFO was $2.42B ($6.46/share), up from $5.62/share.

• Net income attributable to common stockholders was $493.5M ($1.51/share) in Q2 and $1.23B ($3.76/share) for the first half of 2024.

• Domestic NOI increased 5.2% in Q2 and 4.5% for the six months; portfolio NOI increased 4.8% in Q2 and 4.4% for the six months.

• Malls and outlet occupancy reached 95.6%, Mills at 98.2%; average base minimum rent for malls/outlets rose 3% to $57.94/sq ft.

• Retailer sales per sq ft for malls and premium outlets was $741; occupancy cost at quarter-end was 12.7%.

Outlook and guidance

• Raised full-year 2024 FFO guidance to $12.80–$12.90 per share and net income guidance to $7.37–$7.47 per diluted share.

• Guidance increase reflects overcoming $0.15 per share headwinds from retailer restructurings and lower lease settlement/land sales income.

• Management expects positive cash flow from operations in 2024 and sufficient liquidity to meet capital needs and debt maturities.

• Expect year-end occupancy north of 96% due to robust demand.

• Ongoing development/redevelopment projects have a remaining net cash funding requirement of $481M through 2025.