IBJNews

Simon Property results improve as U.S. retail sales advance

Back to TopCommentsE-mailPrintBookmark and Share

Simon Property Group Inc., the largest U.S. shopping-mall owner, said funds from operations rose 20 percent in the second quarter as rents and occupancies increased. The company raised its forecast for the year.

Funds from operations, which gauges a property company’s ability to generate cash, climbed to $583 million, or $1.65 a share, from $487.7 million, or $1.38, a year earlier, the Indianapolis-based real estate investment trust said Tuesday. Analysts expected FFO of $1.58 a share, the average of 18 estimates in a Bloomberg survey.

The company is among regional mall landlords increasing rents as their tenants’ sales rise. Consumer spending, excluding automobiles, gas stations and restaurants, increased 5.5 percent in June from a year earlier, the National Retail Federation said on July 14. That was the 12th straight month of gains.

“Our operating fundamentals reflect the high quality of our assets with higher occupancy, sales and rent than in the year earlier period,” CEO David Simon said in a prepared statement.

Simon also is benefiting from growth in its outlet-center business as apparel companies and other retailers expand in that part of industry. The company last year bought Prime Outlets Acquisition Co. for $2.3 billion to expand the business by 21 properties. It sold Prime Outlets at Jeffersonville after the Federal Trade Commission required the company to dispose of one of its two southwest Ohio centers as part of the Prime purchase.

“They’ve greatly benefited from having a quarter of their portfolio in outlet centers,” said Cedrik Lachance, managing director at Green Street Advisors Inc., a REIT-research firm in Newport Beach, Calif.

Simon raised its FFO forecast for the year to $6.65 to $6.73 a share. The company in April projected 2011 FFO of $6.55 to $6.65 a share.

The results were announced before the start of regular U.S. trading. Simon shares fell $1.38, or 1.1 percent, to $120.47 Monday in New York Stock Exchange composite trading. Shares have advanced 21 percent this year, compared with a 12 percent increase in the Bloomberg REIT Index.

Simon, the largest U.S. REIT by market value, owns or has stakes in almost 400 properties in North America, Europe and Asia.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

ADVERTISEMENT