NEW HYDE PARK, NY-“Overall, the shopping center industry, and our portfolio in particular, continue to display steady improvement” thanks in part to limited development, David Henry, Kimco Realty Corp.’s vice chairman, president and CEO, said Wednesday in a conference call for investors. As a case in point, the shopping center REIT’s fourth-quarter 2012 adjusted funds from operations rose 10% year over year, while its portfolio-wide occupancy level of 93.8% at year’s end was the highest since the pre-Lehman Q3 of 2008.
And Henry doesn’t see the momentum slowing down as the current year progresses. “We’re optimistic about the 2013 performance of our portfolio and the industry,” he said during Wednesday’s call.
The company’s full-year guidance calls for FFO of $1.28 to 1.33 per diluted share, compared to $1.25 per diluted share for the 12 months that ended Dec. 31. Kimco is projecting portfolio occupancy to increase between 50 and 75 basis points by the end of this year, and same-property NOI to grow by 2.5% to 3.5%.
What CFO Glenn Cohen called “meaningful asset recycling” is expected to continue throughout the year. For one thing, Cohen said, Kimco’s non-retail exposure will be reduced to a “nominal” presence within its $10-billion portfolio. A big step toward reducing that presence was taken in Q4 with the $735-million sale of InTown Suites, an extended-stay lodging chain, to Starwood Capital Group.
For another thing, Kimco is aiming to shrink its Latin American footprint, which currently encompasses 15 shopping centers in Brazil, Chile and Peru. In the future, Henry said, the company will focus on North America, in particular a handful of “strong core markets” with high barriers to entry.