Simon Property Group Inc, the largest U.S. mall operator, posted better-than-expected quarterly funds from operations. These rose nearly 13 percent despite a write-off for a community in Arizona.
Fourth-quarter funds from operations increased to $507.7 million, or $1.76 per share, from $450.4 million, or $1.57 per share, a year earlier.
Simon Property Group announced plans to record a non-cash impairment charge of $26 million in the fourth quarter of its entire equity investment in a joint venture created to develop a master planned community of residential units in northwest Phoenix, Arizona. This is expected to reduce diluted net
income available to stockholders by $0.11 per share.
UBS argues that investors should consider regional mall stocks, especially Simon Property Group, even if consumer spending erodes, asserting that the sector is well positioned to weather the coming market.
Simon Property Group announced a 59% increase of net income from higher asset gains, namely increases in store rents and revenues from new shopping centers. Third-quarter net income reached $179.2 million, or 74 cents a share, from $113 million, or 43 cents, compared with that of the previous year.