The locally based company that has projects underway in France, Korea and China is heading for Russia. "We're close on one deal and thinking about another deal," David Simon, CEO, said during a conference call.
Regarding its April 3 acquisition of Arlington, VA-based Mills Corp., Simon said a special team has been assembled to integrate that company's nearly 40 malls and outlet centers. "We think a dedicated team to do that with big-brother help from us on the mall side, and big-brother help from Chelsea on the Chelsea side, will essentially add to (net income)," he said, referring to the Chelsea outlet centers Simon acquired in 2004. Simon acquired Mills in a JV with Farallon Capital Group Inc., a hedge fund.
Average sales rose 9.2% to average $485 per sf at Chelsea outlet centers during the opening quarter of this year. And rent rates at those centers were up 4.1% to an average of $24.84 per sf.
Sales at the company's mall properties rose 5.6% to average $487 per sf, while the average rent rate was up 3.9% to $36.18 per sf. "We are still very optimistic that demand has not been receding," said Rick Sokolov, president, during the conference call.
Simon's net operating income increased 3.7% at mall properties and 10.6% at outlet centers. Funds from operations reached $392.4 million, a 9.3%-increase compared with $358.9 million for the same quarter a year ago.
As a result, Simon lifted its full-year earnings forecast to between $1.87 a share and $1.97 a share. That is up from its January estimate of between $1.82 a share and $1.92 a share.
Shares of SPG have risen nearly 16% on the NYSE this year. In response to an analyst's question, Simon acknowledged that the company's board of directors would likely discuss a stock split.
Shares closed on Friday, April 27, at $117.10 a share, up 1% for the day. The 52-week high of $123.96 a share was reached this Feb. 7. The 52-week low of $76.14 a share occurred on May 24, 2006.
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