DOW JONES NEWSWIRES 
 

Simon Property Group Inc.'s (SPG) fourth-quarter net income rose 22% on strong performance from its outlet centers.

But the largest U.S. mall owner by number of properties gave a cautious outlook. The real-estate investment trust sees 2009 earnings of $1.95 to $2.15 and funds from operation, a key profitability measure for REITs, of $6.40 to $6.60 a share. Analysts surveyed by Thomson Reuters had expected $2.27 and $6.56, respectively.

Simon's shares fell 1% to $44 in premarket trading. The stock has lost more than half its value since September.

The company also said Friday it would switch the format of its 90-cent quarterly dividend payment to 10% cash and 90% stock, still allowing it to meet the requirement for real estate investment trusts' dividends, but also allowing it to conserve cash.

REITs, especially those dealing in commercial retail property, have been slammed of late as commercial real estate prices have dropped and foreclosures have risen. REITs posted their worst year on record last year.

Meanwhile, Simon - which owns 386 malls and shopping centers globally - posted fourth-quarter net income of $152.3 million, or 64 cents a share, up from $125 million, or 51 cents a share, a year earlier. Last year's results included 60 cents in write-downs and losses from discontinued operations.

Funds from operations rose to $1.86 a share from $1.76 a share. Revenue slid 0.6% to $1.03 billion.

Analysts surveyed by Thomson Reuters expected earnings of 80 cents, funds from operations of $1.85 and revenue of $1.01 billion.

The regional malls unit saw occupancy rates fall 1.1 percentage points as average rents increased 6.5%. At premium outlets, occupancy dropped 0.8 percentage point and rents rose 7.7%. Comparable-store sales per square foot declined 4.3% at malls but rose 1.8% at outlets.

Retail sales have been declining as customers curb their discretionary spending - which means retailers are weaker and poses more difficulties for landlords, some of whom carry heavy debt loads.

Struggling retailers have even begun asking landlords to lower rents to ease their burden somewhat. Chief Executive David Simon said earlier this month that the only tenants who have asked the company for concessions are those in bankruptcy or about to file.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.