Kiwi Income Property Trust's annual net profit rose 23% to nearly $110 million, boosted by a rise in the value of the trust's properties.
Those properties are now worth $2.08 billion, up 3.4% on a year ago.
Nevertheless the trust's operating profit fell nearly 15% and, although it will pay a cash distribution of 6.6 cents per unit, that represents a payout ratio of about 107%.
The underlying profit drop reflects rents no longer received from a building which was sold, higher interest costs and performance fees paid to the manager.
The chairman of the trust's manager, Mark Ford, says the company is confident enough about the outlook that it's comfortable with drawing on reserves to make distributions.
The value of its portfolio of shopping centres and office buildings rose $21 million overall.
That is despite the value of its Majestic Centre office building in Wellington, which is currently undergoing earthquake strengthening, falling by $14.5 million to just over $61 million.
The trust sees a subdued outlook for the Wellington office market.
A stand-out in the portfolio was the $40 million increase in the value of its Sylvia Park shopping centre in Auckland, now worth $540 million.