DNZ Property Fund has posted a 66 per cent gain in annual profit as it benefited from its property divestment plan, selling five properties and boosting the value of its remaining assets.

Net profit rose to $68.8 million in the 12 months ended March 31, from $41.6 million, a year earlier, the Auckland-based company said.  Net rental income was little changed at $57m while corporate expenses fell 32 per cent to $6.1m and finance expenses declined 1.9 per cent to $13m.

Chief executive Peter Alexander joined the company in December 2013 with the aim of restructuring the property investor to boost returns.

In the past year, DNZ, the sixth-biggest property stock on the NZX 50 Index by market capitalisation, sold $32m of assets as part of a plan to divest $80m of property.  The remaining 41 urban commercial office, retail and industrial properties increased 5.1 per cent in value over the period to $872.4m.

“We will continue our targeted divestment programme which, together with the flexibility and capacity in our balance sheet, will enhance our performance and provide better returns in accordance with our strategy,” Mr Alexander said.

DNZ said its NorthWest Shopping Centre development in Auckland, scheduled for completion in October, had 100 tenancies confirmed as at March 31 with construction 70 per cent completed.

The completion of the centre will be a key activity in the coming year “and will have a very positive effect on earnings growth”, Mr Alexander said without providing further details.

The company said it expects to complete a review of redevelopment options for its Johnsonville Shopping Centre in Wellington by late 2015.

In the 2014 financial year, the company wrote down the Johnsonville centre by $3.2m as a delay in construction pushed costs up beyond what the finished project would be worth.

By Tina Morrison