General Growth Properties, Inc. (GGP)

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General Growth Properties Inc. (GGP)

Citi Global Property Conference

March 05, 2013 01:35 PM ET

Executives

Sandeep Mathrani - CEO

Michael Berman - EVP and CFO

Analysts

Michael Bilerman - Citi

Presentation

Michael Bilerman - Citi

Welcome to the 1:35 p.m. session of Citi’s 2013 Global Property CEO Conference. This session is for investing clients only. We are extremely pleased to have with us General Growth Properties, Sandeep Mathrani and Michael Berman. Sandeep, I’ll turn over to you for some opening remarks and then we’ll kick it off for Q&A.

Sandeep Mathrani

Thanks Michael, thanks for inviting General Growth to the annual conference. As you said, you have it a booking us some 7:30 till the conference ends and we do enjoy, we learn a lot. GGP, we have been at GGP for now little over two years and we come a long way in these two years. Our focus has been in the owner of great retail properties predominately in the United States.

We are I would like to sit back and say a fairly boring company now. We own 78 malls, 30 B plus malls and 25 B malls for a grand total of 125 malls. Our growth is all internal, predominately from increasing occupancy, increasing rents, and in redevelopment expansion pipeline. As we’ve said earlier, this year we anticipate a 4% NOI growth this year which equates to little over 5% EBITDA growth and a double digit FFO growth.

We anticipate that growth level for the next few years with the internal growth that we have highlighted. We are very focused on the three-leg approach for our growth and on the hedge side we’ve continued to latter our maturities and Michael will expand on that a little effectively. We have finished by the first quarter our targets for 2013. On the leasing side almost 80% of our target for 2013 has been accomplished already, so we feel pretty bullish that we will get to our targets for this year.

And now I can turn it to for any questions you’d like ask to us.

Question-and-Answer Session

Michael Bilerman - Citi

Great, Sandeep, I don’t know if you’ve seen any of the summaries but we’ve been opening up each of these sessions with the same question which is, what do you think is the most value creating opportunity that you currently have within the company that you don’t think the market is attributing much a value for?

Sandeep Mathrani

You know, Michael, I thought about that question that very hard since I’ve seen every CEO trying to answer that question and my answer is going to be exactly what I said earlier. My job is to focus on the internal growth which is to continue to focus on increasing the occupancy, increasing rents and focusing on my redevelopment. All I can do is focus on growing NOI, growing EBITDA and growing FFO and the market will do what the market will do.

Michael Bilerman - Citi

But do you think the market is not giving you the appropriate value for those increases right now?

Sandeep Mathrani

It's not for me to value that. I am not going to sit here and hunt on what the market is valuing or not valuing.

Michael Bilerman - Citi

My other question is whether there is something within the entity that has upside that just hasn’t been crystallized or that you don’t get asked about that you are like, god, there is a large redevelopment or if we look at our redevelopment platform or our ability to source capital or our ability to on a balance sheet which we can lower our debt and refinance all these proceeds, I think sponsorship income is going to grow and has a big opportunity as we synergize. I can go on but I don’t want…

Sandeep Mathrani

I know Michael you can and my view is that quarter-over-quarter as we perform, okay the market will continue to reward us and that’s pretty simple. I think it’s very hard for us to sit here and say, you know something, you haven’t seen that billion dollar development pipeline, you are not valuing that correctly and I read every one of the people’s report and it’s very hard for me sort of sit back and say that someone is not listening to something that we have said because I firmly believe that all of you listen to everything we say. That’s okay. So I find it incredibly hard that people make comments that you are not listening and so I really believe, it’s really a question, the business is quite simple, we tell you something and we have to perform and if we continue to perform, okay the market will reward us and that’s our job.

Michael Bilerman - Citi

But I would say if you go back what the market wasn’t giving you the appropriate value for previously was the quality of the asset base and to do that you ended up spinning off out of bankruptcy was how it was used and then you spun off a Rouse. So I don’t know if there is any other sort of elements within the company that or just there is a better value for elsewhere or that now that we're in this portfolio that there is more upside.

Sandeep Mathrani

I think once again, I think the market values the fact that you continue to perform. If your FFO continues to go up the market will reward you, it will be evident. I think time will tell. And that’s why me telling you that there is more development. If there is more development, I'll develop and when I develop I’ll produce the income and when I produce the income you will reward me. For me to sort of sit here and tell you that there is some future development of $1 billion that will come online in 2018, that you should reward me today; it’s kind of foolish. I am not going to make that comment.

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