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CHICAGO-General Growth Properties, Inc., the retail REIT that had already seen its stock drop sharply in recent weeks, has upped its most recently quarterly dividend 23% to $0.65 per share. The dividend will be paid Oct. 31 to shareholders of record as of Oct. 15.

The $1.7-billion retail REIT has posted annual funds-from-operations growth of 16% over the last eight years. Although the increase will help General Growth Properties remain in compliance with REIT rules on pay-outs, management decided to go a step further.

“Despite the fact that we are required to pay out only 90% of our taxableincome to remain in compliance with minimum distribution requirements for realestate investment trusts, we believe that it is in the best interest of our shareholders to pay out 100% of our taxable income,” says CEO John Bucksbaum.

General Growth Properties also may consider another dividend increase next year, company officials say. At its most recent stock price, General Growth’s dividend yield is 7.86%.

“While providing our shareholders a substantial dividend increase, we still currently expect the ratio of our dividends paid to funds from operations in 2002 to remain under 50%, leaving us with at least $200 million of undistributed funds from operations to use for growth and working capital,” adds CFO Bernard Freibaum.

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