Simon Property Group is the nation's largest shopping mall and retail center owner, with a portfolio of over 200 retail properties totaling approximately 185 million sq. ft. of leasable space across more than 35 states and Puerto Rico. The self-managed, self-administered real estate investment trust (REIT) owns, develops, and manages regional shopping malls, outlet malls (under the Premium Outlet and The Mills brands), boutique malls, and shopping centers. Its portfolio is concentrated in the US's Southeast, Midwest, and Northeast. The REIT also has stakes in outlet centers in Canada, Mexico, Europe and Asia. CEO and chairman David E. Simon is the son of Melvin Simon, who founded the firm with his brother, Herbert.
Simon Property Group invests in retail real estate properties in North America and Asia. The REIT also has ownership interests in Premium Outlets in Japan, South Korea, Canada, Mexico, and Malaysia. In Europe it has interests in properties in Austria, Italy, the Netherlands, and the UK.
The real estate investment trust owns, develops, and manages retail real estate properties, which consist primarily of malls, Premium Outlets, The Mills, and community/lifestyle centers. Nationwide, it owns or holds an interest in 209 income-producing properties, including malls, Premium Outlets, and The Mills.
As part of its business, Simon has re-instituted redevelopment and expansion initiatives with renovation and expansion projects underway at around 30 properties in the US and Europe.
Internationally, Simon boasts ownership interests in nine Premium Outlets in Japan, three Premium Outlets in South Korea, two outlets in Canada, and one each in Mexico and Malaysia. Simon holds a 20.3% equity stake in Paris-based Klépierre SA, a publicly traded real estate company, which either owns or has an interest in shopping centers in 16 European countries.
Sales and Marketing
Simon's clients include Delta Faucet, Hershey, Cadillac, and Samsung. In 2013 the firm spent $62.3 million for advertising, compared with $55.2 million in 2012.
Higher tenant sales and strong leasing activity have driven revenue growth since 2008 (with the exception of 2014). In fiscal 2015, revenue rose8% to $5.3 billion, drive by higher income from property transactions, and gains on the sale of marketable securities.
Net income has also been steadily rising (excepting 2013), and in fiscal 2015 grew 30% to $2.1 billion on the back of higher net revenue and gains on the sale of assets and interests in three unconsolidated retail properties, and a gain on the sale of Klépierre to Corio in 2014.
The company's cash position improved as cash from operations rose 11% to $3.0 billion.
Simon is focused on international expansion in select markets. Its strategy is to partner with established real estate companies in other countries. In 2013 the company entered several joint ventures to extend its reach in the US and abroad. It is partnering with McArthurGlen Group (having signed a definitive agreement) to form a joint venture through which SPG will invest in McArthurGlen, the leader in upscale, European designer outlets.
In the US, Simon is accumulating shares in its smaller rival Macerich. In 2014 the REIT bought 5.7 million common shares of Macerich and may be looking to buy the rest. Purchasing Macerich would allow Simon to grow at a time when opportunities for new mall development are limited.
Mergers and Acquisitions
In 2014 Simon spun off Washington Prime Group (later renamed WP Glimcher), which holds interests in 98 retail assets, to form an independent, publicly traded REIT. The spinoff included the strip center business, formerly owned by Simon.
In 2012 the company bought a 29% stake in Paris-based property investor Klépierre, which owns some 270 retail properties in France, Belgium, Scandinavia, and elsewhere in Europe. Simon paid BNP Paribas approximately $2 billion for the stake, after which it became Klépierre's largest shareholder. Also in 2012 Simon signed international development agreements to develop up to a dozen outlet centers in Brazil and another outlet in China adjacent to the Shanghai Disney Resort.
Simon acquired 50% of Silver Sands Factory Stores, located in Destin, Florida, in 2012. The center's developer, Howard Group, remained a 50% owner. Simon assumes primary responsibility of leasing and management duties. It opened Merrimack Premium Outlets, an upscale outlet shopping center that serves the Greater Boston and Nashua markets.
Simon in 2012 acquired Paragon Outlets Grand Prairie, located in Grand Prairie, Texas, and Paragon Outlets Livermore Valley in Livermore, California. Simon now owns 100% of each asset.
While the company looks for new opportunities, it also knows when to exit deals, ideally at a profit. In 2012 Simon sold its 49% stake in Gallerie Commerciali Italia to joint venture partner Auchan for $378 million. The deal included interest in 45 properties in Italy.
The founding Simon family, owners of the Indiana Pacers NBA franchise, owns more than 10% of the company. The Vanguard Group owns about 11% of the company.