Net income for 2008 is expected to be more modest in the range of $0.59 and $0.78 per common share. This and other 2008 expectations for the locally based shopping center owner are spelled out in a press release unaccompanied by a conference call.
Core net operating income is expected to grow between 4.5% and 5% in the coming year, excluding the impact of income from lease cancellations. The pool of properties encompasses 21 centers, including the impact of expansions at Twelve Oaks Mall in Novi, MI and Stamford Town Center in Stamford CT.
Without those centers in their entirety, NOI growth would be between 3.5% and 4%, according to the statement. Not included in the NOI guidance are the Mall at Partridge Creek in Clinton Twp., MI and The Pier Shops at Caesars in Atlantic City. "During 2008 we will benefit from the 2007 opening of the Mall at Partridge Creek and the expansions of Twelve Oaks Mall and Stamford Town Center," says Robert Taubman, chairman, president and CEO, in the statement.
No figure is given for occupancy growth in 2008, except that "more modest increases" are expected in the first half than in the second half of the year. Rent per square foot is expected to rise 3%.
Taubman anticipates lease cancellation income of between $7 million and $8 million for the year ahead. Land sale gains of between $3 million and $4 million are expected along with "modest improvement in The Pier Shops' operations versus 2007 levels."
Additional contributing factors in the 2008 guidance are the impact of a management and leasing agreement for Songdo Shopping Center in Incheon, South Korea, which was completed in late November 2007, and the completion of management, leasing and development agreements for The Mall at Studio City in Macau, China, which is expected to come on line during the first quarter of 2008. Total expenses for US and Asia predevelopment activities will cost an estimated $12 million to $13 million.
Refinancings are planned for two JV properties. A new three-year loan on International Plaza in Tampa in January will have proceeds of more than $300 million at a floating rate of Libor plus 1.15%. A 6.6%, $140-million fixed-rate loan on Fair Oaks in Fairfax, VA is expected in April.
At mid-day Dec. 14, TCO common stock was trading at $52.26 a share on the NYSE. The 52-week range is $63.87 a share on Feb. 16 and $45.67 a share on July 27.
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