Simon Property results improve as store rents climb

Back to TopCommentsE-mailPrintBookmark and Share

Simon Property Group Inc., the largest U.S. shopping-mall owner, said funds from operations rose 75 percent in the first quarter as retail sales climbed and an expense to pay off debt wasn’t repeated.

Funds from operations, which gauges a property company’s ability to generate cash, increased to $570.6 million, or $1.61 a share, from $325.6 million, or 94 cents, a year earlier, the Indianapolis-based real estate investment trust said Friday.

Analysts projected Simon would have an FFO of $1.54 a share, the average of 17 estimates in a Bloomberg survey. The company raised its FFO per-share forecast for the year to a range of $6.55 to $6.65 from a previous range of $6.45 to $6.60 a share.

Retail sales rose in March for a ninth consecutive month, the Commerce Department said April 13. General Growth Properties Inc., the second-largest U.S. mall owner, said this week that occupancies at its malls increased to 92.4 percent, and tenant sales climbed 7.3 percent, to $457 a square foot.

“Retail sales have been pretty encouraging,” Craig Guttenplan, senior REIT analyst with CreditSights Inc. in London, said before the report. “It’s an overall positive” that means landlords can increase rents, he said.

Simon owns or has stakes in almost 400 properties in North America, Europe and Asia.

Occupancy at Simon’s U.S. malls increased to 92.9 percent from 92.2 percent and its average rent per square foot rose to $39.26 from $38.72, the company said.

The company recorded a $165.6 million loss on debt extinguishment in the first quarter of 2010 related to tender offers on debt.

The results were announced before the open of U.S. exchanges. Simon shares rose $1.49, or 1.3 percent, to $114.95 each Thursday. They have gained about 16 percent this year, compared with a 12-percent increase in the Bloomberg REIT Index.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ