Simon Property Group (SPG) Q3 2024 earnings summary

Executive summary

• Achieved strong financial and operational performance in Q3 and the first nine months of 2024, with increased leasing volumes, occupancy gains, and total retail sales volumes.

• Raised quarterly dividend to $2.10 per share, a 10.5% year-over-year increase and fourth consecutive quarterly increase, reaching a historical high.

• Portfolio NOI increased 4.6%–5% year-over-year, with U.S. Malls and Premium Outlets ending occupancy at 96.2% and average base minimum rent per square foot up 2.3%.

• Key earnings drivers included higher fixed lease income, increased interest income, and a significant gain from the sale of Authentic Brands Group.

• The company owns or holds interests in 196 U.S. properties and maintains significant international investments, including an 84% stake in Taubman Realty Group and a 22.4% stake in Klépierre.

Financial highlights

• Real Estate FFO for Q3 2024 was $1.144 billion ($3.05/diluted share), up 4.8% year-over-year; FFO was $1.067 billion ($2.84/diluted share), down from $1.201 billion ($3.20/diluted share) due to non-recurring items.

• Nine-month 2024 net income was $1.96 billion ($5.22/diluted share), up from $1.76 billion ($4.68/diluted share) in 2023.

• Domestic NOI increased 5.4% year-over-year; portfolio NOI (including international, constant currency) grew 5%.

• Retailer sales per square foot reached $737, up ~1% year-over-year; total sales volumes up ~1.5%.

• Lease income increased by $156.4 million year-over-year, driven by higher fixed minimum lease consideration and occupancy.

Outlook and guidance

• Affirmed full-year 2024 FFO guidance of $12.80–$12.90 per diluted share, excluding $0.14 per share of unrealized losses on Klépierre bonds and equity instruments.

• Full-year 2024 net income guidance: $7.18–$7.28 per diluted share.

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

• Approximately 30% of the development/redevelopment portfolio expected to stabilize in 2025, contributing to income.

• The company targets stabilized returns of 8–10% on new development, expansion, and redevelopment projects.