Collect Rent From Malls With This High Yield Dividend REIT

You Spend Money At Malls. Now It's Your Time To Collect Money From Malls.

Overview

Simon Property Group (SPG) remains one of the most resilient names in real estate. As the largest retail REIT, SPG owns a diversified portfolio of malls, outlets, and mixed-use properties that continue to drive solid performance even in a challenging high-rate environment. A REIT like SPG allows you to position yourself on the other side of the cash register. You spend money at malls all the time; Now it’s time to collect money from malls.

I was lucky enough to see through the noise and I started a position in SPG around the height of Covid in 2020. When malls were closed and people thought the world was ending, I was busy looking for opportunities to capitalize. Looking at the chart below, we can see how SPG has outperformed the S&P 500 over the last five years by a wide margin of outperformance.

Earnings Strength and Dividend Support

SPG's Q4 earnings highlight continued stability:

• FFO per share: $3.35

• Dividend Yield: ~5.3%

• Dividend coverage: 159%

• Total 2024 FFO: $12.99 per share (up 3.9% year-over-year)

The dividend remains well-supported, with the current yield hovering around 5.3%. SPG has steadily grown its dividend at a 3.23% CAGR over the past three years, bringing payouts back to pre-pandemic levels.

Strong cash flows and disciplined management suggest future dividend hikes are likely, which is critical for income investors looking for dependable, growing payouts.

Portfolio Health and Growth Initiatives

SPG’s portfolio remains robust with high occupancy rates:

• U.S. Malls & Premium Outlets: 96.5% occupied

• The Mills properties: 98.8% occupied (record high)

The company continues to strategically expand and redevelop, including new international projects (Jakarta premium outlets) and four to five mixed-use developments underway for 2025. Looking at the current portfolio, SPG’s properties span across the nation and provide an efficient level of diversity.

We can see that their tenant list contains many of the global brands we are all familiar with. What I like is that SPG’s tenants are diverse across different socioeconomic levels, so SPG can effectively capture revenue from difference classes of shoppers.