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Federal Realty's (FRT) Q2 FFO & Revenues Beat, Dividend Hiked
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Federal Realty Investment Trust’s (FRT - Free Report) second-quarter 2024 funds from operations (FFO) per share of $1.69 surpassed the Zacks Consensus Estimate of $1.68. The figure marked a rise of 1.2% from the year-ago quarter’s tally of $1.67.
Results reflect healthy leasing activity and better-than-expected growth in revenues. The retail REIT also tightened and raised its guidance for 2024 FFO per share and announced a hike in the dividend.
Quarterly revenues of $296.1 million outpaced the consensus mark of $292.9 million and improved 5.5% from the year-ago quarter’s tally.
Per Donald C. Wood, Federal Realty's CEO, "The robust leasing demand we continue to see is a clear indicator of the value and attractiveness of our properties, setting a solid foundation for strong future earnings growth.”
Behind the Headlines
In terms of leasing, during the reported quarter, Federal Realty signed 124 leases for 600,669 square feet of retail space. On a comparable space basis, the company signed 122 leases for 594,361 square feet of space at an average rent of $37.72 per square foot. This denotes cash-basis rollover growth of 10% and 23% on a straight-line basis.
On the operational front, the portfolio occupancy rate increased 30 basis points (bps) year over year to 93.1% as of Jun 30, 2024. The portfolio was 95.3% leased as of the same date, a 100 bps increase year over year. Our estimate for the metric was 94.4%. Moreover, FRT’s residential properties were 97.6% leased as of the same date.
Sustained robust leasing activity for small shops resulted in a quarter-ending lease rate of 92.5%, marking a 2.3% rise year over year.
Moreover, Federal Realty registered comparable property operating income growth of 2.9% for the second quarter. This is exclusive of lease termination fees and prior-period rents collected.
Federal Realty exited the second quarter of 2024 with cash and cash equivalents of $103.2 million, up from $95.9 million recorded at the end of the first quarter of 2024.
Portfolio Activity
In April 2024, Federal Realty purchased around 10% non-controlling interest in the partnership that owns CocoWalk in suburban Miami, FL, for $12.4 million. This brought FRT’s ownership to 100%.
In May 2024, FRT acquired the 664,000-square-foot, 110-acre super-regional community center - Virginia Gateway - in Gainesville, VA, for $215 million, thereby expanding its presence further in the region.
In June 2024, FRT completed the sale of residual assets on Third Street Promenade in Santa Monica, CA, for $103 million. This resulted in a gain on sale of $52 million.
Dividend
Concurrent with the second-quarter earnings release, Federal Realty announced a regular quarterly cash dividend of $1.10 per share, which marks an increase from $1.09 paid earlier. The latest hike represents the 57th consecutive year of common dividend increases by the company.
The new dividend indicates an annual rate of $4.40 per share. The dividend will be paid out on Oct 15 to shareholders of record as of Oct 1, 2024.
Guidance
For 2024, FRT revised its guidance for FFO per share in the range of $6.70-$6.88 from $6.67-$6.87 guided earlier. The Zacks Consensus Estimate of $6.80 also stands within this range.
Macerich (MAC - Free Report) reported an FFO per share of 44 cents, which beat the Zacks Consensus Estimate of 40 cents. Moreover, the figure increased 18.9% from the year-ago quarter’s 37 cents.
Results reflected an increase in same-center net operating income. The company is also making continuous efforts to refine its portfolio quality and improve its balance sheet. MAC currently carries a Zacks Rank #3.
Kimco Realty Corp. (KIM - Free Report) reported a second-quarter 2024 FFO per share of 41 cents, which beat the Zacks Consensus Estimate of 40 cents. The reported figure grew 5.1% from the year-ago quarter’s tally.
Results reflected growth in revenues on a year-over-year basis. However, a rise in interest expenses acted as a dampener. KIM currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Federal Realty's (FRT) Q2 FFO & Revenues Beat, Dividend Hiked
Federal Realty Investment Trust’s (FRT - Free Report) second-quarter 2024 funds from operations (FFO) per share of $1.69 surpassed the Zacks Consensus Estimate of $1.68. The figure marked a rise of 1.2% from the year-ago quarter’s tally of $1.67.
Results reflect healthy leasing activity and better-than-expected growth in revenues. The retail REIT also tightened and raised its guidance for 2024 FFO per share and announced a hike in the dividend.
Quarterly revenues of $296.1 million outpaced the consensus mark of $292.9 million and improved 5.5% from the year-ago quarter’s tally.
Per Donald C. Wood, Federal Realty's CEO, "The robust leasing demand we continue to see is a clear indicator of the value and attractiveness of our properties, setting a solid foundation for strong future earnings growth.”
Behind the Headlines
In terms of leasing, during the reported quarter, Federal Realty signed 124 leases for 600,669 square feet of retail space. On a comparable space basis, the company signed 122 leases for 594,361 square feet of space at an average rent of $37.72 per square foot. This denotes cash-basis rollover growth of 10% and 23% on a straight-line basis.
On the operational front, the portfolio occupancy rate increased 30 basis points (bps) year over year to 93.1% as of Jun 30, 2024. The portfolio was 95.3% leased as of the same date, a 100 bps increase year over year. Our estimate for the metric was 94.4%. Moreover, FRT’s residential properties were 97.6% leased as of the same date.
Sustained robust leasing activity for small shops resulted in a quarter-ending lease rate of 92.5%, marking a 2.3% rise year over year.
Moreover, Federal Realty registered comparable property operating income growth of 2.9% for the second quarter. This is exclusive of lease termination fees and prior-period rents collected.
Federal Realty exited the second quarter of 2024 with cash and cash equivalents of $103.2 million, up from $95.9 million recorded at the end of the first quarter of 2024.
Portfolio Activity
In April 2024, Federal Realty purchased around 10% non-controlling interest in the partnership that owns CocoWalk in suburban Miami, FL, for $12.4 million. This brought FRT’s ownership to 100%.
In May 2024, FRT acquired the 664,000-square-foot, 110-acre super-regional community center - Virginia Gateway - in Gainesville, VA, for $215 million, thereby expanding its presence further in the region.
In June 2024, FRT completed the sale of residual assets on Third Street Promenade in Santa Monica, CA, for $103 million. This resulted in a gain on sale of $52 million.
Dividend
Concurrent with the second-quarter earnings release, Federal Realty announced a regular quarterly cash dividend of $1.10 per share, which marks an increase from $1.09 paid earlier. The latest hike represents the 57th consecutive year of common dividend increases by the company.
The new dividend indicates an annual rate of $4.40 per share. The dividend will be paid out on Oct 15 to shareholders of record as of Oct 1, 2024.
Guidance
For 2024, FRT revised its guidance for FFO per share in the range of $6.70-$6.88 from $6.67-$6.87 guided earlier. The Zacks Consensus Estimate of $6.80 also stands within this range.
Federal Realty currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Federal Realty Investment Trust Price, Consensus and EPS Surprise
Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote
Performance of Other Retail REITs
Macerich (MAC - Free Report) reported an FFO per share of 44 cents, which beat the Zacks Consensus Estimate of 40 cents. Moreover, the figure increased 18.9% from the year-ago quarter’s 37 cents.
Results reflected an increase in same-center net operating income. The company is also making continuous efforts to refine its portfolio quality and improve its balance sheet. MAC currently carries a Zacks Rank #3.
Kimco Realty Corp. (KIM - Free Report) reported a second-quarter 2024 FFO per share of 41 cents, which beat the Zacks Consensus Estimate of 40 cents. The reported figure grew 5.1% from the year-ago quarter’s tally.
Results reflected growth in revenues on a year-over-year basis. However, a rise in interest expenses acted as a dampener. KIM currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.