Stationary retail is dead, long live stationary retail.

In the corona year 2020, all U.S. rides that own and lease stationary retail properties were hit hard. Mall operators, i.e. providers of large shopping temples, were particularly hard hit. There are plenty of these in the USA, significantly more than in Europe and actually far too many of them. The industry was already in crisis mode before Corona. Too much space and the booming e-commerce sector were taking their toll on brick-and-mortar retail. Then came Corona: rents failed to materialize, especially for mall operators, and dividends were almost entirely cancelled.

At its peak, the mall sector lost an average of 60% of its share price within a very short period of time. As bad as the whole thing was, there was something positive to take away from it. It has become clear which companies are solidly on the way. The top dog in this segment is Simon Property Group by a wide margin.

Simon Property Group is one of the largest real estate holding companies in the world. The company owns, manages, leases, acquires and expands high-revenue shopping centers. The portfolio consists of over 325 properties in various U.S. states and Puerto Rico that are wholly or partially owned by the company. These are regional, community shopping centers and mixed-use properties. The company also holds interests in numerous shopping centers in Europe, seven premium outlet centers in Japan, three additional outlet malls in Korea, Malaysia and Mexico. The company is one of the largest landlords of commercial retail space within the United States.

Simon also had to cut its dividend in 2020, by 38% to be precise. However, this was a much smaller cut than most of its competitors. Here, the previously moderate payout ratio paid off. The dividend was paid out at a reduced level for the first time in July 2020. In June 2021, August 2021 and November 2021 the dividend was increased three times in three quarters. The dividend per share and quarter now amounts to $1.65 and is thus "only" just under 20% below the "pre-Corona payment".

The company was never seriously threatened by Corona, rather it was able to think about taking over stumbled competitors, which it then did with the acquisition of Taubman Centers.

Simon Property's share price has risen 107% over the year and has already returned to pre-Corona levels. FFO are also almost back at the pre-Corona level.

At the moment, I personally think the stock is too expensive for a repeat purchase. However, the company has shown that it is one of the strong players in the mall sector. So if you don't believe that the online market will disrupt all malls, Simon Property Group is definitely worth a look.