Kiwi Income Property Trust, owner of Auckland's Sylvia Park Shopping Centre, has paid a $1.4 million performance fee to its manager while reporting a 16 percent decline in pretax operating earnings for the first half of the year.
Operating earnings fell to $34.7 million in the six months ended September 30, from $41.2m a year earlier.
Net rental income declined to $68m from $72m.
Net profit in the period was $26.6m from $1.5m a year earlier, when it took charges for property revaluations and impairments.
Kiwi Income is managed by Kiwi Income Properties, a unit of Australia's Colonial First State Property.
In the first half the manager reaped a $1.4m "total return performance fee" because the trust's performance exceeded a 10 percent hurdle.
At the same time, the net interest expense rose by $1.3m.
Units of Kiwi Income fell 0.9 percent to $1.165 on the NZX on Wednesday and have gained 18 percent this year.
During the period the trust sold Beca House in Auckland for $55m and received insurance proceeds for the quake-damaged PwC Centre in Christchurch, using the proceeds of both to repay some $100m of bank debt and reducing its bank debt gearing ratio to 32.3 percent.
"Whilst positive from a balance sheet perspective, the absence of rental income from Beca House and the PwC Centre has contributed to a lower operating result," the trust said.
Mark Ford, chairman of the management company, said the outlook "is governed by the current moderate pace of economic recovery in New Zealand and we continue to see the need to remain cautious".
Subject to a continuation of reasonable economic conditions, the projected year-end distribution to unit holders was affirmed at 6.6 cents a unit.