Ushering in good news for its shareholders, Taubman Centers Inc. (TCO) announced a special cash dividend of $4.75 per share, which was an outcome of the sale of seven malls to Starwood Capital Group in Oct 2014.
This special dividend will be paid in addition to the regular quarterly dividend of 54 cents per share, resulting in a total payout of $5.29 per share. Both dividends will be paid on Dec 31, 2014, to shareholders of record on Dec 15.
As a matter of fact, in October, Taubman completed the previously announced divestiture of seven malls to Starwood Capital Group, for a transaction value of $1.403 billion (prior to transaction expenses). This comes as part of the company’s focus on leveraging the rising interest of investors in premium region malls and recycling its capital.
Net cash proceeds reaped from this transaction amounted to $736 million, after the retirement of property-level debt and accrued interest of $623 million, and transaction costs of $44 million. Of this, Taubman’s share was $716 million.
Solid dividend payouts remain arguably the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of their annual taxable income in the form of dividends to shareholders.
Taubman has established an impressive track record of conservative capital management and cash returns to its shareholders in the form of a steady dividend payout. Since the company went public in 1992, it has never slashed its common dividend, but has in fact hiked it 17 times to date, with the most recent being in March this year. Taubman currently carries a Zacks Rank #3 (Hold).
In recent months, a number of REITs also came up with announcements of dividend hikes. Among them is included Kimco Realty Corp. (KIM) that declared a 6.7% hike in its quarterly cash dividend rate to 24 cents per share from 22.5 cents on its common stock.
SL Green Realty Corp. (SLG) also announced a 20% sequential increase in its fourth-quarter 2014 dividend to 60 cents from the previous 50 cents while General Growth Properties Inc. (GGP) unveiled a fourth-quarter common stock dividend of 17 cents per share, representing an increase of 6.3% year over year.
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