General Growth FFO Rises as Rents Increase
November 02 2015 - 5:17PM
Dow Jones News
By Josh Beckerman
General Growth Properties Inc. posted higher funds from
operations in the third quarter as initial rental rates and tenant
sales increased.
General Growth, the nation's second-largest mall owner by number
of properties, also increased its dividend by a penny to 19
cents.
The company has been slimming operations and accelerating its
redevelopment pipeline since exiting bankruptcy in 2010. It has
increased its focus on high-end urban locations, including Fifth
Avenue in Manhattan and Michigan Avenue in Chicago.
Store closings by J.C. Penney Co. and Sears Holdings Corp. have
posed a threat to the industry as the loss of anchor tenants can
cause remaining stores to leave or renegotiate their leass. Upscale
malls have fared better than the overall sector recently.
On Oct. 27, Simon Property Group Inc., the largest mall owner in
the U.S., raised its full-year guidance as it posted a 4.9%
increase in base minimum rent per square foot.
General Growth Properties said initial rental rates for leases
beginning in the trailing 12 months on a suite-to-suite basis
increased 9.7% to $63.30 per square foot compared with the rates
for expiring leases.
The company reported a profit of $123.9 million, or 13 cents a
share, compared with $74.6 million, or seven cents a share, a year
earlier.
Funds from operations rose to 36 cents a share from 33 cents.
General Growth had projected 34 cents to 36 cents a share.
Revenue fell 7% to $585.3 million. Analysts polled by Thomson
Reuters expected $589 million.
The company reaffirmed its Aug. 3 projection of fourth-quarter
FFO of 41 cents to 43 cents a share, resulting in a full-year
estimate of $1.42 to $1.44. For 2016, it expects $1.51 to
$1.55.
In August, General Growth added $500 million to its
stock-buyback program.
Write to Josh Beckerman at josh.beckerman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 02, 2015 17:02 ET (22:02 GMT)
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