Forum Shops owner reports earnings jump

Jennifer Shubinski

Thursday, Oct. 28, 2004 | 10:46 a.m.

Simon Property Group, the world's largest owner of shopping malls and the owner of the Forum Shops at Caesars in Las Vegas, reported Wednesday that third-quarter earnings grew because of strong leasing activity and sales.

The Indianapolis-based company reported a profit of $81.9 million, or 36 cents per share, up from $58.4 million, or 22 cents in the year-ago quarter.

Revenue grew 11 percent to $623.45 million.

"These results were achieved despite a $2.3 million negative impact to our Florida properties as a result of physical damage from the four hurricanes," David Simon, chief executive, said in a statement. "With the addition of Chelsea Property Group to our organization and our strong development pipeline in the U.S. and Europe, we are well positioned to continue to grow our business."

Simon Property Group this month completed its $5.1 billion acquisition of Chelsea Property Group Inc. Chelsea will operate as a division of Simon out of its current headquarters in Roseland, N.J.

Simon attributed the improvement to strong leasing; average base rents for mall and freestanding stores in its regional mall portfolio were $33.07 per square foot as of Sept. 30, an increase of $1.20 or 3.8 percent from the same time a year ago.

Also cited was strong sales activity. Comparable annual retail sales per square foot increased 5.8 percent to $421 as of Sept. 30, as compared with $394 the same time a year ago.

Because of the merger Simon now owns the Las Vegas Premium Outlets and Las Vegas Outlet Center. The Las Vegas Premium Outlets, at Grand Central Parkway and Interstate 15 in downtown Las Vegas, had been a joint venture between Simon and Chelsea.

In October the company opened its 175,000-square-foot expansion of the Forum Shops at Caesars. The three-level addition added about 60 luxury stores and restaurants.