Simon Property Group Inc., the largest mall owner in the country and operator of several high-profile malls in Massachusetts, has reported a drop in fourth-quarter funds from operations and said it would sell its interest in seven shopping centers in France and Poland.
The company, which is the biggest REIT nationwide, said on Friday fourth-quarter funds from operations (FFO) fell to $485 million, or $1.40 per share, from $540.5 million, from $1.86 per share, in the year earlier quarter.
Excluding $88.1 million of non-cash impairment charges, fourth-quarter FFO was $1.66 per share.
"These are significant accomplishments given the state of the U.S. economy and the challenges faced by consumers in 2009," David Simon, chairman and chief executive, said in a statement.
FFO, a measure of performance, removes the profit-reducing effect of depreciation, a noncash accounting item.
The Indianapolis-based company owns or has an interest in 382 properties comprising 261 million square feet of leasable space in North America, Europe and Asia. Locally, it owns the Burlington Mall, Boston’s upscale Copley Place and Braintree’s South Shore Plaza.
Simon also said that Simon Ivanhoe, one of its two European joint-ventures, would sell itself to Unibail-Rodamco SA for 715 million euros ($980 million). Simon expects to record a gain of $300 million for the sale, which is expected to close in the first half 2010.
Simon and joint venture partner Ivanhoe Cambridge also agreed to team up with Unibail-Rodamco to develop of five retail projects in which Simon will have a 25 percent interest.
Simon, which had been one of the first to pay its dividend partly in stock as a response to the credit crisis, reinstated the full-cash portions of its dividend of 60 cents per share. The dividend is subject to board approval.
During the quarter mall occupancy nationwide fell to 92.1 percent from 92.4 percent a year earlier. Average sales per square foot dropped 7.9 percent to $433. Rent for new leases was just 1.4 percent higher than expiring ones.
For its outlet properties, occupancy slipped to 97.9 percent from 98.9 percent. Sales per square foot fell 1.8 percent to $500. Rent for new leases was about 21 percent higher than for expired ones.
At the end of the year, Simon had $4.3 billion of cash on hand, and $3.1 billion available under its credit facility.
Simon forecast 2010 FFO of $5.72 to $5.87 per share, excluding a charge connected with last month’s tender offer for some of its bonds. Including the charge, it forecast FFO of $5.25 to $5.40 per share.
