- This article has been a long time coming, with nearly 4.3% of my portfolio being invested in Simon Property Group.
- I’m long SPG at a comparatively appealing cost basis, around the current price level, having bought in both before and during the crisis.
- SPG fundamentals coupled with post-pandemic trends promise positive RoR both in the short term and long term, coupled with a truly excellent yield.
- If you’re not invested in SPG, this company is a “BUY” today – but it might not be this cheap for very long.
I’ve not written a specific article on Simon Property Group (SPG) despite this being the largest US holding my portfolio has since the COVID-19 pandemic. While a modest position prior to when the share price began to fall, I made sure to successively expand the position as the crisis worsened at increasingly appealing valuations.
The time has come to look at the company, see where things might go from here in the long run – Simon Property Group is, after all, a very long-term investment – and what we can expect in terms of returns.
I’ve made no secret that I believe returns from real estate/REITs going forward may not reflect historical rates of return. When looking at companies like Federal Realty Investment Trust (FRT), I calculate returns based essentially on current valuations instead of any major sort of recovery to historic valuations. If it happens – excellent. I believe, however, that consumer trends will shift slightly away from malls over the coming decades, and this will result in somewhat lower traffic flow and returns here.
Still, buying top-quality operators and real estate owners at bargain prices is always a good recipe for market-beating returns – and that’s what we’re looking at today.
It’s time to look at Simon Property Group.
