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Simon Sees Rent Rates and Occupancy Rise

INDIANAPOLIS-While FFO, revenue, rent rates and occupancy climb for Simon in Q2, costs related to the Mills integration cause a 27.7% drop in income.

By Marita Thomas | Updated on July 31, 2007

INDIANAPOLIS-Despite a 27.7% decline in income for the second quarter, Simon Property Group Inc. reported increases in nearly all other measures of performance and raised its 2007 forecast. Higher-than-expected costs related to the integration of Mills Corp. assets are blamed for the drop in income.

While net income fell from $82.9 million in the second quarter of 2006 to $59.9 million in this year’s second quarter, funds from operations lifted to $373 million for the quarter ended June 30, 2007, up 4.1% from $358.4 million in the prior-year quarter.

The largest US owner of shopping malls and outlet centers reported some slowdown in shopping at lower-end stores at some of its properties. During a conference call, management said it had taken a potential fall-off in sales and demand for space into consideration in its 2007 forecast.

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