Simon Property Group Inc. (SPG), the largest U.S. shopping-mall owner, raised its forecast for funds from operations after second-quarter results beat analyst estimates on higher rents and occupancies.
Funds from operations, which gauges a property company’s ability to generate cash, climbed to $583 million, or $1.65 a share, in the second quarter, from $487.7 million, or $1.38, a year earlier, the Indianapolis-based real estate investment trust said today in a statement. Analysts expected FFO of $1.58 a share, the average of 18 estimates in a Bloomberg survey.
The company is among regional mall landlords increasing rents as their tenants’ sales rise. Consumer spending, excluding automobiles, gas stations and restaurants, increased 5.5 percent in June from a year earlier, the National Retail Federation said on July 14. That was the 12th straight month of gains.
“The consumer, actually, I feel a little bit better about,” David Simon, Simon’s chairman and chief executive officer, said today in a conference call with analysts.
The mall owner increased its FFO forecast for the year to $6.65 to $6.73 a share. In April, it projected 2011 FFO of $6.55 to $6.65 a share.
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