April 20 - Luxury mall owner Taubman Centers Inc reported sales per square foot at its tenants' stores rose 14 percent in the first quarter, underscoring the strength at top quality malls and their ability to outperform lower quality malls.

Twelve Oaks shopping centre, owned by Taubamn Centers Inc

The performance translates into sales of $581 per square foot for the past 12 months, making Taubman's portfolio of malls among the most valuable in the country.

Average rent rose 3.5 percent to $45.20 per square foot from a year earlier, Taubman said on Wednesday. Its properties include The Mall at Short Hills, in New Jersey, and Fair Oaks Mall in Fairfax, Virginia.

For the quarter, funds from operations rose to $36.2 million, or 63 cents per share, up from $33.5 million or 60 cents per share, meeting analysts' average forecast.

The results include a non-cash charge of 6 cents per share for the Pier Shops at Caesars in Atlantic City, New Jersey, and Regency Square, in Richmond, Virginia, two struggling centers Taubman is negotiating to give back to lenders.

Taubman raised the lower end of its forecast for funds from operations in 2011 to a range of $2.88 per share to $2.98 per share, excluding the Pier Shops and Regency Square, from the previous $2.86 per share to $2.98 per share.

(Reporting by Ilaina Jonas; Editing by Tim Dobbyn)