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Federal Realty Investment Trust reported third-quarter revenue of USD 322.3 million, exceeding analyst expectations of USD 315 million, driven by strong tenant demand and rising rental income across its grocery-anchored retail portfolio. The trust's partnerships with essential retailers such as Trader Joe's, Whole Foods, and Safeway helped sustain growth amid inflationary pressures. Funds from operations (FFO) stood at USD 1.77 per share, matching forecasts. Federal Realty raised the lower end of its annual FFO guidance to USD 7.20-7.26 per share and narrowed its profit outlook to USD 3.93-3.99 per share. The results underscore the resilience of necessity-based retail assets and management's confidence in steady rental growth and occupancy stability.
Federal Realty Investment Trust reported its third-quarter results earlier this week, revealing that revenue surpassed market expectations, driven by resilient tenant demand and increased rental income across its portfolio of grocery-anchored shopping centres. The trust's consistent leasing to essential retailers, including Trader Joe's, Whole Foods and Safeway, continued to support its growth, particularly as consumers prioritised necessary purchases amid inflationary conditions. Advertisement
The company's strategically positioned assets in urban and densely populated locations helped cushion the impact of broader economic challenges, including trade policy shifts. With the supply of retail space contracting, many commercial real estate firms, including Federal Realty, have been able to implement rent increases.
The company's total revenue rose to USD 322.3 million in the quarter ended September, compared with USD 303.6 million during the same period last year. Analysts had projected revenue of about USD 315 million, according to data from LSEG. Federal Realty's funds from operations (FFO) stood at USD 1.77 per share, aligning with analyst forecasts.
In its revised outlook, the firm raised the lower end of its annual FFO guidance and now expects FFO per share to range between USD 7.20 and USD 7.26, compared with its earlier projection of USD 7.16 to USD 7.26. Additionally, the annual profit forecast has been narrowed to between USD 3.93 and USD 3.99 per share, slightly adjusting its prior range of USD 3.91 to USD 4.01.
The company's peer, Regency Centers, also lifted its annual FFO guidance earlier this week, citing sustained leasing momentum in the retail sector.
Federal Realty's strong quarterly performance highlights the ongoing resilience of grocery-anchored retail spaces, where necessity-based tenants continue to ensure stable occupancy and rental growth. By maintaining a portfolio concentrated in high-demand urban markets, the trust has positioned itself well to navigate economic fluctuations. Its upward revision of financial forecasts further signals management's confidence in sustained tenant demand and healthy rent-driven revenue through the coming quarters.
Source - Reuters
5th Jun, 2025
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