On Thursday, real estate investment trust Kimco Realty (NYSE: KIM) topped market expectations for second-quarter revenue and lifted forecast for annual funds from operations, helped by steady leasing demand at its grocery-anchored shopping centers.
A shrink in the supply of rental spaces has allowed commercial real estate firms such as Kimco to raise rental rates despite some weakness in consumer spending affecting retailers.
“We see these positive trends continuing, and with $63 million of future cash flow from signed leases that have yet to commence paying rent, we are comfortable raising our full-year outlook,” Chief Operating Officer Conor Flynn said.
Kimco Realty (NYSE: KIM) completed its all-stock acquisition of RPT Realty as the company looked to consolidate its presence in the Sun Belt region in the United States that extends through states such as Virginia, Texas, Florida, and Nevada.
Kimco’s portfolio occupancy rate rose by 40 basis points year-over-year to 96.2% in the quarter ended June 30.
Kimco added that its small shop occupancy was at 91.7% in the second quarter, matching an all-time high for the company.
The Jericho, New York-headquartered firm now expects full-year funds from operations between $1.60 and $1.62 per share, compared with its earlier target of FFO per share of $1.56 to $1.60.
Kimco’s total revenue of $500.2 million for the second quarter beat analysts’ average estimates of $497.8 million, as per LSEG data. Net revenue from rental properties was $496.2 million.
The company’s funds from operations, a key REIT metric that defines cash flow from core operations, rose to 41 cents per share in the quarter from 39 cents a year ago. Analysts had expected an FFO of 40 cents.
(Source: ReutersReuters)
