Breaking NewsGlobeSt.com will be offline for scheduled maintenance Friday Feb. 26 9 PM US EST to Saturday Feb. 27 6 AM EST. We apologize for the inconvenience.

 
X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

INDIANAPOLIS-Simon Property Group released better-than-expected results for the quarter and six months ended June 30. Richard S. Sokolov, president and chief operating officer told investors during Thursday’s earnings call that the REIT was “pleased to report another excellent quarter with strong financial and operational results.”

Diluted funds from operations–considered a key measure of a REIT’s operating performance–for the quarter increased 30.1% to $349.4 million from $268.5 million in 2004. On a per share basis the increase was 16.8% to $1.18 from $1.01 in the second quarter of 2004. Diluted FFO of the Simon portfolio for the six months increased 30.7% to $683.2 million from $522.8 million in 2004. On a per share basis the increase was 17.3% to $2.31 per share from $1.97 per share in 2004.

BofA Securities Equity released a report stating that Simon’s reported FFO was 6 cents above Wall Street estimates. “The upside does not appear to relate to one item, but looks to be primarily due to higher-than-expected percentage rents, unexpected credit loss recoveries, modestly lower-than-expected G&A and higher-than-expected ‘other income,’” BofA reports.

The REIT raised its guidance for 2005, expecting diluted FFO to be within a range of $4.80 to $4.85 per share for the year ending December 31, 2005, and diluted net income to be within a range of $1.67 to $1.72 per share. As of June 30, comparable sales per sf increased from a year ago in all property categories with a jump of 5.5% to $442 in its regional malls; 7.3% to $426 in its Premium Outlet centers; and a 2.3% increase to $218 in the community/lifestyle center category.

During the last year, occupancy of Simon-owned regional malls increased 90 basis points from the same period last year to 92.2%, while its Premium Outlet centers increased 120 basis points to 99.2% occupancy. The company’s community/lifestyle centers remained stable at 91.5%. Average rents also increased across the board with the region mall sector generating $34.16 per sf, up from $32.92 in the same period last year; $22.83 per sf for Premium Outlet centers, up 7.9% from $21.16; and $11.13 for community/lifestyle centers from $10.77 last year.

During the quarter, Simon opened the $58 million first phase of Seattle Premium Outlets, a 381,000-sf outlet center in Tulalip, WA, 35 miles north of Seattle, and Wolf Ranch, a $98 million 670,000-sf community center located north of Austin, TX in Georgetown. The company started construction on three new projects in Q2 including: Round Rock Premium Outlets, a 433,000-sf outlet center in Round Rock, TX, anticipated to open in the fall of 2006; the Domain, a 700,000-sf urban village in Austin, TX, slated to open in March 2007; and the Village at SouthPark, mixed-use project adjacent to Simon’s SouthPark Mall in Charlotte, NC. Simon continues construction on: The 785,000-sf open-air regional shopping center Firewheel Town Center in Garland, TX; Coconut Point, an open-air, mixed-use mainstreet regional shopping center in Estero/Bonita Springs, FL; and three development projects in Italy, partially owned by Gallerie Commerciali Italia, the company’s Italian joint venture.

Further international activity has been announced throughout the quarter with a signed an agreement with Seoul-based Shinsegae Co. Ltd. and Shinsegae International Co. Ltd. to jointly develop Premium Outlet centers in South Korea; the opening of a regional office in Hong Kong; and most recently, an agreement with the Morgan Stanley Real Estate Funds and Szitic Commercial Property Co. Ltd. to develop retail shopping center projects in China.

The company’s current total market capitalization is approximately $39 billion. Through its subsidiary partnership, it currently owns or has an interest in 294 properties in the US containing an aggregate of 201 million sf of gross leasable area in 40 states plus Puerto Rico. Simon also holds interests in 51 European shopping centers in France, Italy, Poland and Portugal; five Premium Outlet centers in Japan; one Premium Outlet center in Mexico; and one shopping center in Canada.

Following the Q2 announcement Thursday, shares of Simon Property gained 1.1% to $79.56.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.