Earnings rise for No. 2 mall owner

Corey Perrine/Staff A mall patron passes by the window of the newest store, Forever 21, Wednesday, June 16 at Augusta Mall. In the past five years 45 stores have sprung up and thrived in the shopping center according to General Manager Linda Hardin.

General Growth Properties Inc., the No. 2 U.S. mall owner, said fourth-quarter earnings rose, helped by higher rents and occupancy rates.


Core funds from operations rose to $279.8 million, or 29 cents per share, up from $230.1 million, or 23 cents a share, in the year-earlier quarter.

Funds from operations is a performance measure used by real estate investment trusts that strips out the profit-reducing effect that depreciation has on earnings and does not include property sales losses and gains. General Growth’s core FFO excludes noncash items and some noncomparable items.

Since emerging from bankruptcy at the end of 2010, the company has been repositioning itself, focusing on its most highly productive malls and spinning off or selling others.

It sold Boston’s Faneuil Hall Marketplace for $140 million in October. Its most recent disposition was the spinoff to shareholders of 30 underperforming malls in a company called Rouse Properties Inc.

Following the January completion of the spinoff of Rouse, General Growth owned or had interest in 136 malls, inlcuding Augusta Mall. During the fourth quarter, sales at its tenants’ stores rose 7.9 percent to $505 per square foot on a trailing 12-month basis.

That compares with Simon Property Group Inc’s 10.7 percent averge increase in tenant sales to $536 per square foot and Taubman Centers Inc’s 14.2 rise to $641 per square foot, underscoring the productivity of better malls.

“It’s going to take General Growth a little longer,” said Jeung Hyun, Adelante Capital Management portfolio manager.

General Growth’s mall portfolio was 94.6 percent leased at the end of 2011, up 1.1 percentage points from the end of 2010.

For 2012, Chicago-based General Growth affirmed its earlier forecast of full-year core FFO in the range of 90 cents to 94 center per share. For the first quarter, it sees core FFO in the range of 21 cents to 23 cents per share. Analysts had forecast 91 cents per share for the year and 21 cents for the year.