Capital Properties has increased its after-tax operating profit before revaluations by 15 per cent to $18.1 million.
Unrealised property revaluations of $79.1 million boosted the bottom line to $97.15 million for the year to March, against $35.7 million last year.
A third of the revaluations resulted from higher rents.
ChairmanColin Beyer said rental income was expected to rise as rent reviews fell due.
"The company projects pre-tax earnings per share should rise by over 20 per cent from 9c for the March 2005 financial year, to 11c by March 2007."
Last month, Capital Properties ditched plans to sell management rights worth about $40 million after opposition to the sale by large shareholders Kiwi Income Property Trust and AMP.
Capital started looking at a sale last November when Auckland-based Kiwi seized a 19.9 per cent stake, sparking talk of a takeover bid.
Net property income for the year rose 6 per cent to $42.3 million and, excluding the effect of acquisitions, was up 4 per cent.
The portfolio was revalued up 18.5 per cent from a year ago as a result of the higher rents, a reduction in market capitalisation rates, improved rental performance and a fuller recognition of the value of development sites.
Beyer said the rise in rental income and the value of assets was an endorsement of its investment strategy. Shareholders had had a 30 per cent annual return over the last two years.
Pre-tax profit was up 17 per cent at $21.6 million after interest costs of $16.1 million and administration expenses of $4.6 million. Lower interest costs resulted from the one-for-three rights issue last year.
At March 31, the firm's portfolio was valued at $536.6 million, up $108.8 million from a year earlier, including the $32 million Centre City Shopping Centre at New Plymouth.
Net tangible assets per share have risen to $1.29 from 95c a year earlier.
The portfolio's net income yield is 8.9 per cent, occupancy levels are 99 per cent and the weighted average lease term is 4.2 years.
Beyer said that over the year, shareholders' funds had risen by $82.3 million to $306 million, representing 55 per cent of total assets.
A new Defence Department building in Wellington is forecast to add $72.5 million to the portfolio when the 18-year lease starts in early 2007.
