Simon Property Group, the largest owner of shopping centers in the U.S., expects this year to be markedly better than last year.
The main reason cited for the improvement is that some retailers have started thinking about opening new outlets, with tenants better able to pay their rents on time. At least, that's according to David Simon, CEO of Simon Property Group, who shared his thoughts with analysts.
He also revealed that his team is already in talks with various merchants, including Kohl's, Dick's Sporting Goods, and Primark. But according to Simon, it will still take some time to get back to 2019 levels. Still, the industry is already on the road to recovery. Florida was cited as a positive example, where there has been an increase in mall traffic. The second-best performing place in the U.S. is Texas.
The announcement came after Simon Property Group released results for the fourth holiday quarter, showing that the coronavirus pandemic continues to take its toll on the industry. The company's total revenue fell about 24% to $1.13 billion, down markedly from $1.49 billion a year earlier. The company's year-end mall occupancy rate was 91.3%, down from 95.1% a year earlier.
The company also reduced rents for small local businesses and restaurant owners during the pandemic by a total of $400 million. That said, even the big tenants have yet to pay off their lease debts.
Overall, the market has been favorable to the company's financial results and its CEO's statement. The value of Simon Property Group shares increased by 2% (in 2020, they lost 30% in value at once). Overall, the company is positively mood as it expects to post a net income of $4.60 to $4.85 per share this year.