Simon Property said the spinoff, through a distribution to
shareholders, would boost its sales per square foot, net
operating income and occupancy rates.
The company's shares rose 2.4 percent before the bell.
The new company is expected to initially own or have an interest
in 54 strip malls as well as in 44 smaller enclosed malls with
annual net operating income of up to $10 million each.
The new company's funds from operations are expected to be about
$300 million, or 80 cents per share, in the first year, Simon
Real estate investment trusts (REITs), which must pay out at
least 90 percent of their taxable income to shareholders as
dividends, are subject to lower taxes and pay higher dividends
than other companies.
Simon Property said the REIT's dividend was estimated to be at
least 50 cents per share in the first year, representing 100
percent of taxable income.
Richard Sokolow, Simon Property's president and chief operating
officer, will be the chairman of the new company's board. Chief
Executive David Simon will be a director.
Simon Property's portfolio includes Roosevelt Field Mall and
Woodbury Common Premium Outlets in New York, Forum Shops at
Caesars Palace in Las Vegas and Lenox Square Mall in Atlanta.
BofA Merrill Lynch and Goldman Sachs acted as financial advisers
to the company.
Simon Property shares closed at $148.37 on the New York Stock
Exchange on Thursday. The stock has fallen 6 percent this year
to Thursday's close.
(Reporting by Mridhula Raghavan in
Bangalore; editing by Kirti Pandey)
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