Simon Property forecasts annual FFO above expectations as retail rents rise

Feb 2 (Reuters) - Commercial real estate investment trust Simon Property Group (SPG) forecast 2026 funds from operations largely above market expectations on Monday, betting on high rents at its malls and shopping centers.

The tight ?supply of rental properties has given more room to mall operators such ?as Simon Property (SPG) to raise rental rates.

However, higher ?borrowing rates and weakening consumer sentiment have ?forced retailers to ?curb expansion plans, posing risks to leasing demand for commercial real estate.

One ?of the largest shopping ?mall owners in the United States, Simon Property Group (SPG), has moved to terminate leases with Saks Global ?after the luxury retailer ?filed ?for Chapter 11 bankruptcy amid efforts to restructure and sell its stores. Simon Property (SPG) expects annual FFO per ?share to be in the range of $13 to $13.25, the midpoint of which is above estimates of $13.08, according to data compiled by LSEG.

Base minimum rent per square foot was $60.97 at December 31, 2025, compared to $58.26 a ?year ?ago. For the fourth quarter, the company reported FFO of $3.27 per share, compared with analysts' average estimate ?of $3.47 per share.

The company recorded a one-time loss of 31 cents per share in its quarterly FFO related to restructuring costs of JCPenney-owner Catalyst Brands, of which Simon Property (SPG) is a shareholder.

It posted revenue of $1.80 billion in the quarter ended December 31, compared ?with estimates of $1.51 billion.

Simon Property (SPG) counts LVMH - the luxury conglomerate behind Louis Vuitton, Christian Dior, Hennessy and Tiffany & Co - among its top tenants. (Reporting ?by Koyena Das in Bengaluru; Editing by Alan Barona)