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Simon posts strong quarter as mall occupancy strengthens

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Simon Property Group Inc., the largest U.S. shopping-mall owner, reported an 8.1-percent increase in fourth-quarter funds from operations as retailer demand for space in outlet centers climbed.

FFO, which gauges a property company’s ability to generate cash, rose to $894.8 million, or $2.47 a share, from $827.4 million, or $2.29, a year earlier, the Indianapolis-based real estate investment trust said Friday morning.

The average of 22 analyst estimates was $2.43 a share, according to data compiled by Bloomberg. Simon declared a $1.25 per share dividend, up from $1.20 for the previous three months and 8.7 percent more than a year earlier.

Simon is benefiting as retailers seek space in outlet centers, where brand-name items are sold at a discount.

Overall, occupancy in its malls climbed to 96.1 percent in December from 95.3 percent at the end of 2012 as total sales per square foot increased from $568 to $582. Rents also grew, to $42.34 per square foot in the fourth quarter from $40.73 in the year-ago period.

Profit increased 21 percent, to $381.6 million, or $1.23 per share, compared with $315.4 million, or $1.01 per share, in the fourth quarter of 2012.

Quarterly revenue rose 5 percent, to $1.4 billion.

“This was an excellent quarter and year for Simon Property Group, capped off by our 20th anniversary as a public company in December,” Simon CEO David Simon said in a prepared statement. “We produced strong financial and operating results in the fourth quarter, led by 5.5-percent growth in comparable property net operating income for our U.S. malls and premium outlets."

For the entire year, Simon reported FFO of $3.2 billion, or $8.85 per share, compared with $2.9 billion, or $7.98 per share, in 2012. The company forecast 2014 FFO per share in the range of $9.50 to $9.60.

Net income in 2013 fell slightly, to $1.3 billion, or $4.24 per share, compared with $1.4 billion,  or $4.72, in the prior year. Results for 2012 include non-cash net gains from acquisitions and dispositions of $1.41 per share.

Revenue in 2013 grew 5.9 percent, to $5.2 billion.

In December, Simon announced that it will spin off all of its strip centers and 44 smaller malls into a separate public company. The transaction should be completed in the second quarter, Simon said.

Simon shares rose 2.9 percent in premarket trading, to $155 each.
 

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  • Repay the people
    Well now Simon can repay Indianapolis the 400 million we have given them for the Circle Center Mall

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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