Kiwi Income Property Trust's (KIP) first-half net profit fell to just $1.5 million from $13.7 million in the previous first half after write-downs in the value of its properties.
But distributable profit after tax was up 9.1 percent to $36 million in the six months ended September 30.
Property investors tend to prefer distributable earnings as a benchmark, as it strips out unrealised moves in the fair value of their portfolios that have to be recognised under accounting rules.
The manager is forecasting a full-year distribution of about seven cents per unit, in line with previous guidance.
The trust's outlook "continues to be impacted by the current moderate pace of economic recovery within New Zealand," it said.
But it benefits from its diversified portfolio of retail and office properties, its sound and diverse tenant base and its high overall occupancy rate - 98.3 percent at September 30.
"These defensive characteristics, together with a strong financial position and an active management approach, should position the trust to continue delivering solid underlying operating earnings."
KIP has claimed $94.9 million from its insurance company for damage to its PricewaterhouseCoopers Centre in Christchurch, which is to be demolished, and has rejected an offer from its insurer of $47.4 million.
The manager said it has treated $71.2 million of insurance proceeds as income, being the mid-point between its claim and the insurer's offer.
It has also written off $25.8 million from the centre's book value and has recorded the land at the site at $4.5 million.
NZN