Simon Property Group, the biggest mall owner in the U.S., has reopened 77 of its U.S. retail properties that were temporarily closed in March in response to the coronavirus pandemic and said it is encouraged by the customer response so far. The company also reported a 20 percent decrease in its profit for the first quarter from last year.
The real estate investment trust said Monday that it has opened the retail properties in markets where state, as well as local lockdown restrictions, have been eased. It has also reopened twelve of its Designer and international Premium Outlets properties as of May 11.
Simon Property’s owns almost 200 malls and outlet centers in the U.S. The company’s decision to reopen its retail properties comes after its major tenants such as retailers Macy’s and Nordstrom recently announced plans to reopen their stores in a phased manner.
Simon Property said it has suspended or eliminated more than $1.0 billion of capital for new and redevelopment projects. The company will re-evaluate all suspended projects over time.
However, the company is continuing construction on certain redevelopment and new development projects in the U.S. as well as internationally that are nearing completion.
Simon Property’s net income for the first quarter was $437.61 million or $1.43 per share, down from $548.48 million or $1.78 per share in the year-ago period. Analysts polled by Thomson Reuters expected the company to earn $1.63 per share. Analysts’ estimates typically exclude special items.
Funds from operations or FFO were $2.78 per share, compared to $3.04 per share a year ago. Revenue for the quarter fell 6.9 percent to $1.35 billion from $1.45 billion last year.
The company withdrew its previously-issued financial outlook for fiscal 2020, citing the uncertainty regarding the impact of the COVID-19 pandemic.
In response to the pandemic, Simon Property has significantly reduced all non-essential corporate spending as well as property operating expenses and slashed executive pay.
The company also implemented a temporary furlough of certain corporate as well as field employees and implemented a temporary freeze on company hiring efforts.
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