Simon Reports Stable Occupancy, 5% Rise in Base Rents

INDIANAPOLIS-Indianapolis-based Simon Property Group says occupancy in its 36-state, 182-million-sf portfolio of regional malls held steady during the second quarter while average base rents and sales per sf were on the rise.

As of June 30, occupancy for mall and freestanding stores in its regional malls was 91.6%, which is essentially unchanged from the same date in 2002. Comparable retail sales per sf increased to $393 by June 30, 2003, up slightly from $390 at June 30, 2002. Average base rents for mall and freestanding stores in the regional mall portfolio were $31.47 per sf at June 30, 2003, an increase of $1.44 or 5%, from June 30, 2002. The average initial base rent for new mall store leases signed during the first six months of 2003 was $42.90, an increase of $10.11 or 31% over the tenants who closed or whose leases expired.

Diluted FFO for the second quarter 2003 was $196.9 million, or $0.96 per share. In the year-earlier period, diluted FFO was $152.6 million, or $0.81 per share. Simon attributes the rise in FFO to assets acquired from Rodamco North America N.V. in May 2002 and a rebounding economy that has boosted revenue at its properties in Florida and other tourism-driven properties. Net income for the second quarter 2003 was $50.3 million. In the year-earlier period net income was $173.2 million due to the sale of six properties. Simon says it expects net income per share for the year to be within a range of $1.54 to $1.57 and FFO to be within a range of $4.05 to $4.08.