While the coronavirus and many restrictions on brick-and-mortar retailers may make it seem that now is an odd time to invest in luxury shopping malls, King of Prussia Mall owner Simon Property Group is doing the opposite, writes Liz Moyer for Barron’s.
In fact, once the pandemic is behind us, the company may be in surprisingly good shape. It has been using its unusual financial strength to acquire other mall operators, including Taubman Centers.
These even encompass bankrupt apparel retailers Brooks Brothers and Lucky Brand, which will operate in Simon’s key malls.
The company’s stock is currently trading at around half the valuation of other mall real-estate investment trusts, making it deeply discounted. On top of that, the stock has a dividend yield of nearly seven percent.
Piper Sandler’s Alexander Goldfarb noted that improving credit trends and rent payments, as well as the recent encouraging vaccine news, has put Simon Property among the top winners of the stocks he covers.
“While tenant credit remains a concern, the winds are blowing in SPG’s favor,” said Goldfarb.
Read more about Simon Property Group in Barron’s by clicking here.