Simon®, a leading real estate investment trust (REIT) known for its ownership of premier shopping, dining, entertainment, and mixed-use destinations, has reported its financial and operational performance for the second quarter of 2023. In addition to strong results, the company has announced an 8.6% increase in its quarterly common stock dividend for the third quarter of 2023. This article highlights the dividend increase announcement and provides an overview of Simon's recent performance.

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Results for the Quarter and Six Months

In the second quarter of 2023, Simon reported a net income attributable to common stockholders of $486.3 million, or $1.49 per diluted share, compared to $496.7 million, or $1.51 per diluted share in 2022. Funds From Operations (FFO) for the same period were $1.077 billion, or $2.88 per diluted share, slightly lower than the prior year's $1.093 billion, or $2.91 per diluted share. Despite this, domestic property Net Operating Income (NOI) increased by 3.3% and portfolio NOI increased by 3.7% compared to the same period last year.

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For the six months ending June 30, 2023, net income attributable to common stockholders was $938.2 million, or $2.87 per diluted share, compared to $923.4 million, or $2.81 per diluted share in 2022. FFO for the first half of 2023 was $2.103 billion, or $5.62 per diluted share, while it was $2.108 billion, or $5.61 per diluted share in the prior year. Domestic property NOI increased by 3.6%, and portfolio NOI increased by 3.8% during this period.

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U.S. Malls and Premium Outlets Operating Statistics

Simon's U.S. malls and premium outlets performed well in terms of occupancy, which increased to 94.7% as of June 30, 2023, compared to 93.9% in the same period in 2022, showing an 80 basis points improvement. Additionally, the base minimum rent per square foot also increased by 3.1%, reaching $56.27 at the end of June 2023, up from $54.58 in June 2022. Reported retailer sales per square foot stood at $747 for the trailing 12 months ending June 30, 2023.

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Development Activity

Simon has been actively involved in various redevelopment and expansion projects at properties in North America, Europe, and Asia. Notably, in April, the company successfully opened a new shopping destination in Paris-Giverny, France.

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Capital Markets and Balance Sheet Liquidity

During the first six months of 2023, Simon was active in the credit markets, completing nine non-recourse mortgage loans worth approximately $820 million (U.S. dollar equivalent), of which the company's share was $404 million. The weighted average interest rate on these loans was 6.01%. As of June 30, 2023, Simon had a robust liquidity position, with approximately $8.8 billion available, consisting of $1.4 billion in cash on hand, including its share of joint venture cash, and $7.4 billion of available capacity under its revolving credit facilities.

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Dividends

Today, Simon's Board of Directors declared a quarterly common stock dividend of $1.90 for the third quarter of 2023. This represents an increase of $0.15, or 8.6% year-over-year, demonstrating the company's commitment to providing attractive returns to its shareholders. The dividend is set to be payable on September 29, 2023, to shareholders of record on September 8, 2023. Additionally, the Board declared the quarterly dividend on its 8 3/8% Series J Cumulative Redeemable Preferred Stock (SPGPRJ) of $1.046875 per share, payable on September 29, 2023, to shareholders of record on September 15, 2023.

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2023 Guidance

For the year ending December 31, 2023, Simon estimates its net income to be within a range of $6.39 to $6.49 per diluted share and FFO to be within a range of $11.85 to $11.95 per diluted share. This updated FFO per diluted share range shows a slight increase from the $11.80 to $11.95 per diluted share range provided earlier on May 2, 2023, representing a $0.02 per diluted share increase at the mid-point.

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Simon's recent financial and operational results have been promising, and the increase in dividends for the third quarter of 2023 is a positive sign for investors. The company's focus on premier shopping destinations and expansion projects positions it well for continued growth in the real estate market. As Simon continues to develop and strengthen its portfolio, investors can look forward to stable returns and potential long-term value.