Simon, the largest real estate investment trust in the U.S., lifted by higher rents and the sale of some of its ownership in the SPARC partnership, posted a solid third quarter.
Funds from operations, or FFO, was $1.2 billion, or $3.20 a diluted share, as compared to $1.1 billion, or $2.93 a diluted share, in the prior year. Simon also raised its quarterly common stock dividend to $1.90 for the fourth quarter of 2023, an increase of 10 cents, or 5.6 percent year-over-year. The dividend will be payable on Dec. 29 to shareholders of record on Dec. 8.“It sounds a little braggadocius, but if you step back, five, 10, 15, 20, 25 years, we have dramatically outpaced our peer group,” Simon said during a conference call Monday with investors and analysts. “We are not capital constrained where some others might be.
Asked about outlets versus full-price malls, Simon replied, “We are seeing pretty good tenant sales growth on tourism properties, whether outlets or malls. Most of our tourist properties are outlet centers where we are seeing good growth. Sunbelt malls or outlets have produced pretty good results year-to-date. We saw a decent pick up in California, which is encouraging. Woodbury Common is finally getting the tourism back.
Occupancy was 95.2 percent as of Sept. 30, compared to 94.5 percent as of Sept. 30, 2022, an increase of 70 basis points. Due to its lower ownership interest in SPARC, Simon expects a 5-cent lower FFL contribution from SPARC in the fourth quarter.