DOW JONES NEWSWIRES
Simon Property Group Inc.'s (SPG) first-quarter earnings rose
14% amid higher rents, though occupancy rates weakened.
The nation's largest mall owner, whose results topped analysts'
expectations, also expects to cut its dividend the rest of the year
by one-third in light of falling per-share earnings. Meanwhile,
Simon cut its 2009 profit view to reflect the impact of its March
stock sale.
Shares were down 10 cents to $51.50 in premarket trading. The
stock has lost roughly half its value since September amid a broad
REIT stock rout, but has more than doubled the past two months.
Retailers have been pressured by declining sales and credit
woes, posing difficulties for mall landlords, some of whom carry
heavy-debt loads. Shopping-center owner General Growth Properties
Inc. (GGP) is attempting to restructuring $27 billion in debt under
bankruptcy protection.
Simon and other commercial-property owners have been selling
stock to raise funds to cut their debt. Changes in dividend
policies also have reaped savings for REITs.
The company reported earnings of $113.3 million, or 45 cents a
share, up from $99.3 million, or 39 cents a share, a year earlier.
Funds from operations, a key profitability measure for REITs, rose
10% to $1.61 a share as revenue increased 2.6% to $918.5
million.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 25 cents, funds from operations of $1.48 and
revenue of $886 million.
At the regional malls business, occupancy rates fell to 90.8%
from 91.7% while average rents increased 6.8%. Outlet occupancy
declined to 96.9% from 97.9% and rents rose 11%. Comparable-store
sales per square foot were down 7.3% at malls and declined 0.7% at
outlets.
Meanwhile, the company lowered its 2009 earnings view to $1.45
to $1.60 and funds from operations target to $6.05 to $6.20,
compared with $6.40 to $6.60.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com