INDIANAPOLIS—Simon Property Group has raised its full-year guidance on funds from operations after a 21.8% year-over-year increase in FFO for the second quarter. The Q2 FFO of $2.63 per diluted share, or $955.4 million, handily beat the Zacks consensus estimate of $2.35 per share.
David Simon, the retail REIT's chairman and CEO, says the preceding three months were “an excellent quarter” for his company, “with strong financial and operational performance. Our growing development and redevelopment opportunities position us to continue to deliver strong results for our stockholders. Based upon our results to date and expectations for the remainder of 2015, we are once again raising our quarterly dividend and increasing our full-year 2015 guidance.”
The upwardly revised FFO guidance for the year ending Dec. 31 now stands at $10.02 to $10.07 per diluted share, up from an upwardly revised $9.65 to $9.75 per diluted share at the end of Q1. Net income guidance was also boosted from Q1, and is now within a range of $5.47 to $5.52 per diluted share.
During Q2, Simon created a joint venture with Sears Holdings, part of SHLD's plan to spin off a portion of its real estate into a publicly traded, standalone REIT. Subsequent to Q2, Simon bought approximately 1.12 million shares of the spinoff, Seritage Growth Properties, at $29.58 per share.
The company also was active on the development front during Q2. It launched construction on two malls totaling 945,000 square feet in Fort Worth, TX and Columbus, OH in which it has a partial interest, and entered into a development partnership on the 500,000-square-foot retail component of Brickell City Centre in Miami. It also had redevelopment and expansion projects at 28 of its properties as Q2 ended.
“Strong financial as well as operational performance is expected to drive the company's growth, going forward,” according to a Zacks Equity Research note. “With the US economy showing signs of recovery, spending power of richer consumers is improving and the company seems keen on leveraging this trend.”
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
