Simon Property Group Inc reported a 21.9 percent increase in a key earnings measure for the fourth quarter, easily beating analysts' estimates, as rents and sales rose at its malls and outlet centers.
The company, the No. 1 U.S. mall and outlet center owner, also raised its dividend on Monday for the sixth straight quarter.
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"They just continue to defy gravity," Uniplan Investment Counsel Inc President Richard Imperiale said. "When you think they're going to flatten out just because there's no more room on the upside, they continue to churn out good operating results."
Simon is the first large mall operator to report results for the fourth quarter, when holiday shopping was less than stellar.
The only real estate company in the Standard & Poor's 100 index , Simon owns or has an interest in 328 retail properties in North America and Asia.
Simon said fourth-quarter funds from operations had increased to $827.4 million, or $2.29 per share, from $678.9 million, or $1.91 per share, a year earlier.
Analysts on average had expected FFO of $2.17 a share, according to Thomson Reuters I/B/E/S.
FFO, a performance measure for real estate investment trusts, usually excludes gains or losses from property sales and removes the effect that depreciation has on earnings.
Simon's fourth-quarter revenue rose to $1.34 billion from $1.17 billion, while analysts were expecting $1.30 billion.
The company raised its quarterly dividend to $1.15 per share from $1.10. The dividend is payable February 28 to shareholders of record on February 14.
Simon forecast full-year 2013 FFO, excluding one-time items, at $8.40 to $8.50 per share. Analysts expect $8.41 per share for the year, according to Thomson Reuters I/B/E/S.
The company's outlooks tend to be conservative, and Simon often raises them each quarter.
Simon's portfolio includes some of the most popular U.S. malls, including Roosevelt Field Mall and Woodbury Common Premium Outlets in New York, the Forum Shops at Caesars Palace in Las Vegas, and Lenox Square Mall in Atlanta.
The company has international outlet centers in Canada, Malaysia, Japan, Korea and Europe. It is redeveloping or expanding 25 properties in the United States and two in Japan.
In the fourth quarter, sales, rent and occupancy all increased. Sales at tenants' stores at Simon's U.S. core portfolio malls and outlet centers rose 6.6 percent on a trailing 12-month basis to $568 per square foot.
Stronger sales attract tenants and eventually lead to higher rents. Also, landlords take a share of tenants' sales.
Occupancy at Simon's malls and outlet centers rose to 95.3 percent from 94.6 percent a year earlier, and the company was able to push up average base rent 3.4 percent to $40.73 per square foot.
Net operating income, which reflects how well the properties are being managed, rose 4.8 percent for properties owned at least a year.
(Reporting By Ilaina Jonas; Editing by Gerald E. McCormick and Lisa Von Ahn)