By Brian Louis
CHICAGO - General Growth Properties Inc., the second-largest U.S. mall owner and the parent company of Providence Place, said that its funds from operations excluding some items may rise to as much as $1.03 a share next year as occupancies rise.
The forecast, which has a low end of 99 cents, compares with expected 2011 “core” FFO of 93 cents to 95 cents, the real estate investment trust said in an investor presentation filed Dec. 8 with the U.S. Securities and Exchange Commission.
General Growth, which left bankruptcy protection 13 months ago, is refinancing debt to cut expenses and plans to expand, redevelop and refurbish properties to boost growth. In October, the Chicago-based company sold Faneuil Hall Marketplace in Boston, the office and garage components of Westlake Center in Seattle and a shopping center in Provo, Utah, as it focuses on regional malls.
Occupancy probably will rise to 92 percent in 2012 from 90.5 percent this year, according to General Growth, which is holding an investor conference today in Chicago. The company’s properties include Water Tower Place on Michigan Avenue in Chicago and Fashion Show in Las Vegas.
The REIT was expected to have 2012 FFO of 98 cents a share, the average estimate of 10 analysts surveyed by Bloomberg. FFO is a measure of a property owner’s ability to generate cash.
General Growth is planning to spin off 30 malls to shareholders through a special dividend. They will be transferred to a new publicly traded REIT, Rouse Properties Inc. General Growth spent $11.3 billion to buy developer Rouse Co. in 2004. Excluding properties to be included in Rouse, core FFO is likely to be 90 cents to 94 cents next year, General Growth said.
General Growth rose 0.6 percent to $14.29 in New York trading Dec. 7.
Simon Property Group Inc., based in Indianapolis, is the only U.S. mall owner larger than General Growth.