(Reuters) – Simon Property Group Inc’s first-quarter revenue beat market expectations on Tuesday, benefiting from a strong leasing demand after pandemic-induced store closures.
Despite growing fears of a recession in the United States, mall operators are seeing a rise in leasing demand from tenants occupying mall spaces to cater to customers.
“Tenant demand is excellent, and brick-and-mortar stores are where shoppers want to be,” Chief Executive David Simon said on a post-earnings call.
Occupancy rate came in at 94.4% in the first quarter, compared to 93.3% a year ago. The company saw base minimum rent per square foot increase 3.1% to $55.84.
During the quarter, store openings included brands such as Steve Madden, Five Below, JCPenney, Starbucks and Hollister, according to UBS data.
Simon Property’s net revenue from lease income rose 3.3% to $1.25 billion in the quarter ended March 31, slightly above analysts’ estimates of $1.24 billion.
The company also raised the lower end of its 2023 profit and comparable funds from operation (FFO) per diluted share forecasts.
It now expects annual profit in the range of $6.45 to $6.60 per share, mid-point of which is above previous forecast of $6.35 and $6.60.
Simon Property now expects 2023 comparable FFO per diluted share in the range of $11.80 to $11.95, compared with prior outlook of $11.70 and $11.95.
However, it reported a profit of $1.38 per share compared with expectations of $1.39. FFO for the quarter came in at $1.03 billion, or $2.74 per share, compared with expectations of $967.3 million, or $2.81 per share.
(Reporting by Granth Vanaik in Bengaluru; Editing by Maju Samuel and Arun Koyyur)
