Property firm GPT Group has flagged a rise in earnings amid signs that consumers are becoming more willing to splash their cash.
The group - whose portfolio includes shopping centres, office blocks, and business parks used by logistics companies - suffered a 6.4 per cent dip in first half net profit.
But chief executive Michael Cameron said GPT can lift earnings per share by at least three per cent this financial year, aided by its growing logistics business and a pickup in retail sales.
"GPT is in a good position, as the team continues to work the portfolio hard to deliver consistent returns," he said on Tuesday.
"There is the opportunity to add further value as the group completes a number of logistics developments and continues to deliver growth in funds under management."
Chief investment officer Carmel Hourigan said GPT's shopping centre business, which includes Melbourne Central and Sydney's MLC Centre, was going strong.
Occupancy rates were at 99.5 per cent - with just 35 vacancies across 3,300 shops - and could strengthen further if retail sales continue to recover.
The most recent retail spending figures from the Australian Bureau of Statistics beat economists' expectations last week, rising 0.6 per cent in June.
"We've now seen a recovery in the retail sector with improvement in consumer sentiment and household wealth leading to positive retail sales across the portfolio," Ms Hourigan said.
"If we continue to see retail sales recovering, we expect it to provide us the opportunity to unlock additional value at a number of our existing centres."
GPT's net profit fell to $240.6 million in the six months to June 30 from $257 million the previous year, dragged down in part by asset sales.
Ms Hourigan said office markets in Sydney and Melbourne were showing signs of improved activity although vacancies at Sydney's MLC Centre had weighed on overall growth figures.
But a $145 million redevelopment of the centre, including a new food court, facade restoration and yet-to-be-approved luxury retail would establish the centre as one of Sydney's most sought after precincts.
GPT HOPES TO BOUNCE BACK FROM PROFIT SLIDE
*Net profit of $240.6m, down 6.4pct from $257m
*Total revenue of $444.1m, down 4.9pct to $467.1 million
*Final distribution of 10.5 cents, up from 9.5 cents
By Belinda Merhab