Now that we’re firmly into the second half of the year, we can analyze the impact that rising interest rates and inflationary pressures have had on real estate investment trusts (REITs) that own large malls and malls.
For example trendy retail chains for teenagers like Zumiez Inc CURRENTLY and American Eagle Outfitters Inc AEO posted earnings per share for the second quarter, which were lower than the second quarter last year. Additionally, both companies missed consensus estimates for second-quarter earnings per share by over 60%.
The decline in earnings per share can be attributed to worse-than-expected sales, as Zumiez and American Eagles Outfitters reported sales that were down from the second quarter last year. With the CPI reading 8.5% for the 12 months to the end of July, consumer sentiment has deteriorated along with purchasing power.
At the start of the third quarter of 2022, Zumiez issued a revenue guidance that came in below analysts’ estimates. While the second half of the year is typically a positive time for brick-and-mortar retailers as we head into the holiday season, it could potentially be beneficial for these three high-dividend-yielding mall REITs.
Simon Property Group Inc SPG offers a dividend yield of 6.73%, or $7.00 per share annually through quarterly payments, with a decent track record of growing its dividends over the past two years. Simon Property Group is the second largest real estate investment Trust in the United States, and 12 months before the pandemic, the company was averaging $693 per square foot in revenue.
Simon’s portfolio includes interests in 222 properties – including 95 shopping centers, 69 premium outlets, 33 international outlets, 14 Mills centers (a combination of traditional shopping center, outlet center and large retailer), six lifestyle centers and five other retail properties , as of December 31, 2021.
National Retail Properties Inc NNN offers a dividend yield of 4.90% or $2.20 per share annually using quarterly
