Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company's partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development.
Business Analysis of Simon Property Group
The Real Estate & REITs Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Simon Property Group compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Simon Property Group to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Simon Property Group with an interactive chart.
- Revenue Growth: Simon Property Group reported a revenue growth of 3.2% year-on-year during 2016. Retail REITs Industry grew at 1.0% in the same period
- COGS share of Revenues: As a percentage of revenue, Simon Property Group spent 17.9% of its total revenues on COGS. Retail REITs industry average (COGS share of revenue) in the same period was 25.6%
- R&D share of Revenues: Simon Property Group R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Simon Property Group spent 6.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Retail REITs industry average SG&A spending in the same period was 6.6%
- Inventory share of Revenues: Simon Property Group Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Simon Property Group invested 22.3% of its total revenues on Accounts Payable (A/P) Retail REITs industry average Accounts Payable investment in the same period was 27.1%
- Accounts Receivable share of Revenues: As a percentage of revenue, Simon Property Group invested 12.2% of its total revenues on Accounts Receivable (A/R). Retail REITs industry average Accounts Receivable investment in the same period was 12.9%
- PP&E share of Revenues: As a percentage of revenue, Simon Property Group invested 648.1% of its total revenues on Property, Plants, and Equipments (PP&E). Retail REITs industry average PPE investment in the same period was 740.4%
- Intangibles share of Revenues: Simon Property Group Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: Simon Property Group Net Margins in the year 2016 were 33.8%. Retail REITs industry average Net Margins in the same period were 29.8%
Sector and Industry Association of Simon Property Group
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Simon Property Group is associated with Financials Sector Group, Real Estate & REITs Sector, and Retail REITs Industry.
Real Estate & REITs (Real Estate Investment Trusts) sector is comprised of the following industries: Diversified REITs; Industrial & Office REITs; Hotel & Lodging REITs; Retail REITs; Residential REITs; Specialty REITs; Mortgage REITs; Real Estate Holding & Development; Real Estate Services. The definitions for each of the industries is as follows:
- Diversified REITs industry includes REITs or corporations that invest in a variety of property types without a concentration on any single type.
- Industrial & Office REITs industry includes REITs that primarily invest in office, industrial, and flex properties.
- Hotel & Lodging REITs industry includes REITs that primarily invest in hotels or lodging properties.
- Retail REITs industry includes REITs that primarily invest in retail properties, malls, shopping centers, strip centers and factory outlets.
- Residential REITs industry includes REITs that primarily invest in residential home properties, apartment buildings, and residential communities.
- Specialty REITs industry includes REITs that invest in self storage properties, properties in the health care industry such as hospitals, assisted living facilities and health care laboratories, and other specialized properties such as auto dealership facilities, timber properties and net lease properties.
- Mortgage REITs industry includes REITs that are directly involved in lending money to real estate owners and operators or indirectly through the purchase or mortgages or mortgage backed securities.
- Real Estate Holding & Development industry includes companies that invest directly or indirectly in real estate through development, investment or ownership.
- Real Estate Services industry includes companies that provide services to real estate companies but do not own the properties themselves. It includes agencies, brokers, leasing companies, management companies and advisory services.
Industry Ranking of Simon Property Group
With $5.4 billion revenues, Simon Property Group ranked number 1 of all the companies in the US Retail REITs industry. There were a total of 30 public companies in the US Retail REITs industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Retail REITs industry by revenues during 2016 were:
- Simon Property Group ($5.4 billion)
- General Growth Properties ($2.3 billion)
- Brixmor Property Group ($1.3 billion)
- Kimco Realty ($1.2 billion)
- Realty Income ($1.1 billion)
- Macerich ($1 billion)
- CBL & Associates Properties ($1 billion)
- DDR ($1 billion)
- Washington Prime Group ($843.5 million)
- Federal Realty Investment Trust ($801.6 million)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Simon Property Groupand its peers on select key performance indicators by clicking the reports provided below