Simon Property Group Inc. (SPG), the largest U.S. shopping-mall owner, raised its dividend and increased its full-year forecast for funds from operations after second-quarter FFO climbed 18 percent.
FFO, which gauges a property company’s ability to generate cash, will be $7.60 to $7.70 a share this year, the Indianapolis-based real estate investment trust said today in a statement. That compares with a previous forecast of $7.50 to $7.60. Simon boosted its dividend to $1.05 a share from $1.
Demand for space from retailers at regional malls and outlet centers is rising, helping to lift Simon’s revenue. The company also is expanding overseas to increase growth. It bought a 28.7 percent stake in European shopping-center operator Klepierre SA for about $2 billion in March and formed a venture in April with Rio de Janeiro-based BR Malls Participacoes SA (BRML3) to develop outlet centers in Brazil.
Second-quarter FFO rose to $688.8 million, or $1.89 a share, from $583 million, or $1.65, a year earlier, Simon said. The average of 18 estimates in a Bloomberg survey was for FFO of $1.81 a share.
Revenue increased 14 percent to $1.19 billion from $1.04 billion a year earlier. U.S. occupancy climbed to 94.2 percent from 93.6 percent. The base minimum rent was $39.99 a square foot in the quarter, up from $38.57 a year earlier. Tenant sales per square foot rose 10 percent to $554.
The results were released before the start of regular U.S. trading. Simon fell 0.7 percent to $155.94 yesterday in New York. Its shares have advanced 21 percent this year, compared with a 13 percent gain in the Bloomberg REIT (BBREIT) Index.
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