Jul 24, 2009
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Taubman Centers second-quarter funds from operation slips

Jul 24, 2009

NEW YORK, July 23 (Reuters) - Taubman Centers Inc (TCO.N), a luxury mall owner and developer, reported quarterly funds from operations (FFO) fell on lower occupancy and rent.

Taubman Centers Inc malls, The Pier Shops at Caesars (left) and Twelve Oaks (right)

Taubman on Thursday 23 July posted second-quarter FFO, a performance measure for real estate investment trusts, of $34.9 million, or 65 cents per share -- down from $35.4 million, or 66 cents per share, in the year-earlier quarter.

Analysts on average had expected 65 cents a share, according to Reuters Estimates.

The decline was cushioned by greater lease termination fees and cost savings, Taubman said.

"The environment for retail real estate continues to be challenging," Robert Taubman, chairman and chief executive officer, said in a statement.

At the end of the quarter, the occupancy rate at Taubman's centers fell to 88.6 percent from 90.1 percent a year earlier, due primarily to the 2008 closing of three big box stores at the company's value centers. The store closings were the result
of tenant bankruptcies.

Average rent per square foot in the company's 16 consolidated properties fell to $43, down from $44.40 in the second quarter of 2008.

For the second consecutive quarter, mall tenant sales per square foot fell by double digits. In the second quarter, tenant sales declined 11.2 percent compared with a year

For the 12 months ended June 30, 2009, mall tenant sales per square foot fell 9.8 percent to $508 per square foot.

Taubman narrowed its full-year 2009 FFO to a range of $2.70 to $2.90 per share from a prior range of $2.69 to $2.94 per share. Excluding a restructuring charge, Taubman expects adjusted 2009 FFO in the range of $2.73 to $2.93, narrowed from
the prior forecast of $2.72 to $2.97 per share.

Before earnings were released Taubman shares closed at $27.12, up $1.31 or 5 percent on the New York Stock Exchange.

(Reporting by Ilaina Jonas, editing by Matthew Lewis)

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