* Funds from operations $2.29 a share; Wall St expected $2.17
* Simon raises dividend
* Sees full-year 2013 FFO $8.40-$8.50 a share; Wall St view $8.41
* Shares edge higher
By Ilaina Jonas
Feb 4 (Reuters) - Simon Property Group Inc reported a 21.9 percent increase in a key earnings measure for the fourth quarter, easily beating analysts' estimates, as rents and sales rose at its malls and outlet centers.
The No. 1 U.S. mall and outlet center owner also raised its dividend on Monday for the sixth straight quarter.
"They just continue to defy gravity," said Uniplan Investment Counsel President Richard Imperiale, whose fund owns Simon shares. "When you think they're going to flatten out just because there's no more room on the upside, they continue to churn out good operating results."
Simon is the first large mall operator to report results for the fourth quarter, when holiday shopping was less than stellar.
The only real estate company in the Standard & Poor's 100 index, Simon owns or has an interest in 328 retail properties in North America and Asia.
Simon said fourth-quarter funds from operations had increased to $827.4 million, or $2.29 per share, from $678.9 million, or $1.91 per share, a year earlier.
Analysts on average had expected FFO of $2.17 a share, according to Thomson Reuters I/B/E/S.
Expense reduction helped Simon exceed Wall Street estimates, Imperiale said.
For about the past two years, the company has repeatedly beaten analysts' forecasts. On Monday, its shares rose 70 cents to $162.68. Meanwhile, the S&P 500 was down 1 percent and the benchmark REIT index, the MSCI US, fell 0.3 percent.
FFO, a performance measure for real estate investment trusts, usually excludes gains or losses from property sales and removes the effect that depreciation has on earnings.
Simon's fourth-quarter revenue rose to $1.34 billion from $1.17 billion, while analysts were expecting $1.30 billion.
As a real estate investment trust, Simon is required to pay out at least 90 percent of its taxable income to shareholders in exchange for being exempt from most corporate-level income tax. That has prompted Simon to keep raising its dividend.
The company raised its quarterly dividend to $1.15 per share from $1.10. The dividend is payable Feb. 28 to shareholders of record on Feb. 14.
"We did have a really, really good year," Chairman and Chief Executive Officer David Simon said on a conference call with analysts. "We worked our a-- off in '12 to deliver that. We had a lot of moving pieces as we always do. We did a lot of deals. Hopefully, the fruits of those investments did show to some extent in '12. But they'll show more importantly in '13 and '14."
Simon forecast full-year 2013 FFO, excluding one-time items, at $8.40 to $8.50 per share. Analysts expect $8.41 per share for the year, according to Thomson Reuters I/B/E/S.
The company's forecasts tend to be conservative, and Simon often raises them each quarter.
Simon's portfolio includes some of the most popular U.S. malls, including Roosevelt Field Mall and Woodbury Common Premium Outlets in New York, the Forum Shops at Caesars Palace in Las Vegas, and Lenox Square Mall in Atlanta.
The company has outlet centers in Canada, Malaysia, Japan, South Korea and in Europe. It is redeveloping or expanding about two dozen properties in the United States and two in Japan. It also has five of its Premium Outlet brand centers under construction - two in the United States - and plans to break ground on a new one in Montreal in the next quarter.
Simon plans to spend about $5 billion on development and redevelopment over the next three or four years, David Simon said.
Last year, Simon also bought a 28.7 stake in Klepierre SA , Europe's second-largest retail real estate owner, and has three seats on the French company's board. David Simon is chairman.
In the fourth quarter, sales, rent and occupancy all increased. Sales at tenants' stores at Simon's U.S. core portfolio malls and outlet centers rose 6.6 percent on a trailing 12-month basis to $568 per square foot.
Stronger sales attract tenants and eventually lead to higher rents. Also, landlords take a share of tenants' sales.
Occupancy at Simon's malls and outlet centers rose to 95.3 percent from 94.6 percent a year earlier, and the company was able to push up average base rent 3.4 percent to $40.73 per square foot.