INDIANAPOLIS-Simon Property Group Inc. on Friday announced Q3 results, which included a 26.7% increase in funds from operations to $351.9 million from $277.7 million in 2004. On a per share basis, the increase to $1.19 from $1.04 was 14.4%. The company’s results exceeded Wall Street expectations by 3 cents per share.
David Simon, the company’s chief executive officer, attributed the company’s FFO growth to the productivity in its 2004 acquisition of Chelsea Property Group, as well as the completion and opening of several new development projects. Simon also referred to the positive news of Canadian shopping center company Ivanhoe Cambridge, which acquired a 39.5% interest in European Retail Enterprises (“ERE”) earlier this month. ERE owns Groupe BEG, a developer, owner and manager of retail properties in France, Italy, Poland, Portugal, Spain and Turkey. Simon Property Group owns a 34.7% interest in ERE.Simon said the company’s development pipeline continues to be robust, with five additional projects comprising nearly three million sf of gross leasable area under construction and projected to open during the next 12 to 18 months. Developments that opened during the quarter include Wolf Ranch, a 670,000-sf community center north of Austin, TX; and Firewheel Town Center, a 785,000-sf open-air regional shopping center located 15 miles northeast of Downtown Dallas in Garland, TX. At the end of September, the company commenced construction on Rio Grande Valley Premium Outlets, a 404,000-sf upscale outlet center in Mercedes, TX.
The company continues construction on Coconut Point, 1.2-million-sf, open-air, mixed-use mainstreet shopping center in Estero/Bonita Springs, FL; Round Rock Premium Outlets, a 433,000-sf upscale outlet center in Round Rock, TX; and the Village at SouthPark, a mixed-use project comprised of residential and retail components located adjacent to Simon’s SouthPark Mall in Charlotte, NC. Construction also continues on three development projects in Italy, partially owned by Gallerie Commerciali Italia, the Italian joint venture in which the company owns a 49% interest.