April 27, 2011 / 2:08 AM / in 7 years

RPT-UPDATE 2-General Growth first-quarter core FFO up slightly

(Repeats to change headline to UPDATE 2)

* Q1 core funds from operations 22 cents per share

* Sales at malls rise 7.3 percent

* Shares close up 0.3 percent at $15.99 (Recasts first sentence, adds details)

NEW YORK, April 26 (Reuters) - General Growth Properties Inc (GGP.N), which emerged from bankruptcy in November, said comparable tenant sales at its malls rose 7.3 percent in the first quarter.

The company has been working to pare down its debt, increase its leasing activity and boost sales as it transitions from a survival mode to competitor in the U.S. mall sector. The Chicago-based company is the second-largest U.S. mall operator after Simon Property Group Inc (SPG.N).

General Growth on Tuesday reported first-quarter core funds from operations of $220.9 million, or 22 cents per share, compared with $216.3 million or 67 cents per share in the year earlier quarter before the company issued more shares.

Analysts on average expected 23 cents per share, according to Thomson Reuters I/B/E/S.

Funds from operations is a performance measure used by real estate investment trusts. FFO strips out the profit-reducing effect depreciation, a non-cash accounting figure, has on earnings.

During the quarter, General Growth refinanced $1.7 billion on seven malls.

First-quarter net operating income from malls the company has owned for at least a year, a measure of internal growth, rose 1.8 percent to $550.8 million from a year earlier.

PUT IN LEASING

General Growth operates 169 malls and plans to trim that to 150 by selling some and handing over the keys to some underperforming malls to lenders. It is scheduled to hold a conference call with analysts Wednesday morning.

Canada’s Brookfield Asset Management Inc (BAMa.TO) owns or controls about 38 percent of General Growth. Hedge fund Pershing Square Capital, headed by William Ackman, has about a 14 percent stake. Both companies helped recapitalize General Growth, enabling it to emerge from bankruptcy as an independent company.

Shares of General Growth closed at $15.99, up 0.3 percent, or 5 cents on the New York Stock Exchange. (Reporting by Ilaina Jonas; Additional reporting by Helen Kearney and Jonathan Spicer; editing by Carol Bishopric)

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