GGP Ggp Inc. (delisted)

   By Maria Armental 
 

General Growth Properties Inc. (GGP) on Monday raised its projected annual profit as quarterly profit surged five fold driven by property sales, breaking a string of declines.

The Chicago real-estate investment trust, the second-largest mall owner in the U.S. by number of properties, now expects to make this year $1.31 to $1.33 a share and $1.52 to $1.54 in funds from operations, a key industry metric. It had previously projected 70 cents to 74 cents a share in profit and $1.51 to $1.55 a share in FFO.

Last year, it reported a profit of $1.43 a share and FFO of $1.44 a share.

Over all, third-quarter profit surged to $674.2 million, or 70 cents a share, while funds from operations fell to 35 cents a share from 36 cents a year earlier.

Revenue fell 5% to $554.5 million, below analysts' projected $559.7 million.

Rental rates for signed leases signed in the previous 12 months rose 12%, the company said, while tenant sales, excluding anchor stores, rose 1.4%, also on a trailing 12-month basis.

Meanwhile, the percentage of leased properties on a same-store basis improved to 96.7%, from 96.1% in the previous quarter and 96.5% in the year-ago period.

Expenses rose 11% as the company set aside money as a provision for impairment.

General Growth, which during the quarter joined forces with Simon Property Group and Authentic Brands Group LLC to buy teen apparel retailer Aéropostale, has bought five anchor stores from Macy's.

General Growth has been selling properties to pay down debt. It targets lowering its debt burden to about $18.5 billion by year's end. Company officials have said they expect to end the year with about $700 million to $800 million in cash and that they intend to set aside about $250 million of that to pay a special dividend of about 25 cents a share.

Shares, down 8% this year, fell 1.4% to $24.60 in after-hours trading.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

October 31, 2016 17:07 ET (21:07 GMT)

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