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Simon Property Group’s Plan to Increase Shareholder Returns

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Long-term strategy

Simon Property Group (SPG) has devised a long-term strategy that the company believes will achieve continued business success while delivering consistently strong financial performances over a period of time.

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Strategy initiatives

Simon Property’s long-term plan includes the following initiatives:

  • improving product and profitability
  • attracting and retaining high-quality tenants, while utilizing economies of scale to reduce operating expenses
  • expanding and re-tenanting existing, highly-productive locations at competitive rental rates
  • selectively acquiring or increasing its interests in high-quality real estate assets and portfolios of assets
  • increasing presence in major metropolitan markets
  • owning assets along the full price spectrum of retail real estate
  • leading the industry in successful and profitable acquisitions
  • leading the industry in promoting the “mall as a marketing medium”
  • connecting with the community generating consumer traffic in retail properties through marketing initiatives and strategic corporate alliances
  • selling selective non-core assets

International strategy

Simon Property’s international strategy includes partnering with established real estate companies and implementing its domestic expertise and know-how to international markets.

A proven plan

Simon Property believes that the operating strategy has produced positive results in recent years. The company expects that the above strategy will help increase its profitability further while maintaining a strong balance sheet and liquidity position in the years to come.

The strategy is also expected to help thwart competition from other major players like General Growth Properties (GGP) and Macerich (MAC).

Investors looking for exposure in commercial real estate can invest in REIT ETFs. Simon Property Group and Public Storage (PSA) make up 8.16% and 4.06% of Vanguard REIT ETF (VNQ), respectively. Equity Residential (EQR) comprised 6.70% of the iShares Cohen & Steers REIT ETF (ICF).

In the next part of this series, we’ll examine Simon Property’s key operating metrics, such as occupancy rate and sales per square foot.

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