2. SPG Overview
• Largest REIT in World by both Market Cap ($64.9b) and
Total Cap ($92.7b)
• 1,915% Total Return since IPO in 1993
• Interest in More than 350 Properties
• Located in North America, Europe & Asia
5. Corporate Debt
- Rated AA
- Weighted Average Interest of Debt – 4.78%
- Weighted Average Years to Maturity – 5.5
22%
51%
27% Equity
Secured Debt
(Mortgage)
Unsecured Debt
(Corporate Debt)
6. Debt Maturity Schedule (In thousand)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 After
2024
Total Secured Debt Expiration Total Unsecured Debt Expiration
7. 2010 Bond Issuance
• Trades at a Premium - $116
• 5.62% Annual Coupon
• Matures in 2020
• Absolute Spread over 5-YR Treasury – 389 bps
• Relative Spread over 5-YR Treasury – 225 bps
8. New Price (IRR) – 50 BPS
• Current Spread – 76 bps
• New Required Return – 2.99%
• New Price of Bond - $113.25
9. New Price (Duration) – 50 BPS
• Formula = (126.32-114.67)/(2*116*.0005)
• Duration is 10 (I-Rate Risk)
• 50 BPS Increase – 5% Drop in Price
10. Preferred Shares
• Only 255k of Preferred Shares Outstanding
• Less than 1% of SPG’s Capital Structure
• Redemption Price - $100
• Issue Quarterly Distributions @ 7.5% Annual Rate
11. Development & Redevelopment
• Spend $500m to $1b Annually
7%
12%
10%
19%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Mall
Redevelopments
Premium Outlet
Redevelopment
New Premium
Outlet
Mills
Redevelopment
Projected IRR for each type of invesment
12. Asia Investment
• JV with Mitsubishi Estate Co. in Japan
• JV with Shinsegae in South Korea
13. Macerich
• Simon has disclosed that it accumulated a 3.6% stake or
5.71M shares in Macerich and noted that it "may" request that
Macerich waive its excess share provision of 5%.
• Macerich disclosed on 11/17 that it had waived that provision
for Ontario Teachers’ Pension Plan (OTPP) in connection with
Macerich's acquisition of Ontario Teachers' 49% stakes in five
major malls.
• After the deal between OTPP and Macerich, SPG share is
3.39% and now with the 5% excess share provision from
MAC, SPG will have the opportunity to acquire 8.417 million
shares before triggering the excess share provision.
14. Klépierre
• 21% ownership stake
• 300 shopping centers in over 15 countries
• Investing in emerging markets i.e. Poland, Czech Republic,
Slovakia, Slovenia & Hungary
• Divesting away from Southern Europe
• Formed strategic partnerships with Zara, Mango, H&M and
Sephora
15. Retail Sector
• Forecasted to improve throughout the end of 2014 and into
2015
• Strong organic growth through higher occupancies and
increasing rents
• Retailers efficiently utilizing space
• Total portfolio sales increased 3.5% y-o-y
16. WPG Spin-Off
• Spun-Off all of its 98 strip-center businesses
• New REIT – Washington Prime Group
• Only contributed 3.5% of NOI
• Majority of locations in depressed markets
• Since Spin-Off, stock price fell by more than 25%
17. Mergers & Acquisitions
• SPG has engaged in M &A with a number of companies
including:
Gallerie Commerciali Italia S.p.A.
Silver Sands Factory Stores
Paragon Outlets Grand Prairie
Paragon Outlets Livermore Valley
Arizona Mills
Klépierre
18. JV and Accessing Capital
• In 2007, SPG accessed capital from Farrallon Capital to
acquire a stake in Mills Corp, REIT.
• Engaged in atleast 6 Joint Ventures that both acquire and
develop new properties
MacAruthurGlen
Klepierre
Auchin S.A.
Institutional Mall Investors (IMI)
Mitsubishi Estate Co. Ltd.
Shinsegae International Co.
19. FFO
• FY13 - $3.2b (increase from $2.8b FY12)
• FFO – $689m in 3Q14
• 14% increase y-o-y after debt retirement
• FY13 FFO/share – $8.85, record for REIT industry!
• FY14 FFO/share - $9.25
20. Annual FFO Growth
• Year 2018 forecasted to be 25% higher than 2014
$3,357,696
$3,536,561
$3,930,483 $4,021,903
$4,189,873
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2014 2015 2016 2017 2018
Forecast FFO (in thousand)
22. Annual ROA
• SPG purchasing and developing profitable properties
• Able to increase net income in greater proportion to value
of assets
19.00% 19.50% 20.00% 20.50% 21.00% 21.50% 22.00% 22.50% 23.00%
2014
2015
2016
2017
2018
Annual ROA forecast
23. Debt/Total Capital
• FY14 Debt/Cap – 29%
• Dramatically decreasing from 2014 to 2018
• Retirement of two largest debt issuance (2016 and 2018)
serve as catalyst
24. IRR Comparison
• YTD Return:
• Total XIRR if purchased on Mar 09, 2009
SPG: 44.09%
GGP: 157.45%
37.40%
36.27%
YTD Return
GGP SPG
