Wed, 23 Jun 2021

Simon Property reports mall recovery beginning cautiously

Robert Besser
14 May 2021, 16:37 GMT+10

INDIANAPOLIS, Indiana: Results for the quarter ending March 31, 2021 exceeded expectations for real estate investment firm Simon Property Group as the mall giant in the United States stood to benefit from the trickling in of customers to physical storefronts.

Inoculations underway against the coronavirus, relaxation of curbs and the introduction of a novel series of governmental stimuli aided in increasing the number of customers at malls, offering the impetus to Simon to recover from a pandemic-fueled slump last year, when scores of the company's renters closed down or reduced the amount of rental payments.

"The increase in traffic for our open air and suburban centers has been very encouraging, with higher sales volumes in March compared to 2019 levels," David Simon, the company's CEO, noted in a statement.

However, the company has reduced its outlook for full-year profit per share to the U$4.47-US$4.57 range, as compared to the earlier US$4.60-US$4.85 per share.

Simon highlighted that Simon Property Group did not harbor expectations of the occupancy rates reaching those recorded two years ago until 2022 or even 2023, as the company remains determined while negotiating with its tenant base over rentals.

"We still have some difficult relationships and negotiations that we're dealing with. If they're not paying what we think is fair, we'd rather just sit on empty space," according to Simon.

In the Q1 ending March 31, the company suffered losses of almost US$1.15 billion, in terms of lease incomes, a drop of 9.3 percent, though outdoing the estimated US$1.13 billion by the Institutional Brokers' Estimate System. Moreover, Simon Property's net income per share, reaching US$1.36, surpassed 96 cents per share projected by analysts.

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