Kiwi Property Group pushed up net profit after tax by 47 per cent to make $54.2 million in the six months to September 30.
The giant landlord a few weeks ago opened 57 new stores at New Zealand's largest shopping centre, Sylvia park.
Operating profit from the business with $3.2 billion of property fell 8.4 per cent to $55.2m but the property portfolio's valuations rose $11.8m. Investors will get 2.2cps interim dividend.
Revenue dropped from $117.3m in the half-year to September 2019 to $111.3m in the half-year to September 2020 but property revaluations helped boost the bottom line.
Kiwi's tax position improved as well due to the introduction of depreciation on building structures and Covid-relief deductions.
Clive Mackenzie, chief executive, said the steps taken early in the financial year had enabled the company to navigate the financial impacts of Covid-19.
"While operating profit fell for the period, it's important to consider the result within the context of the lockdowns that took place in the first half. Looking ahead, we're focused on delivering a solid performance through the remainder of the 2021 financial year, capitalising on our diversified property portfolio and the successful opening of Sylvia Park Level 1," he said.
In the past year it bought neighbouring Sylvia Park land to accumulate a 12ha site flanked by the railway line. It also owns New Lynn's LynnMall, and Hamilton mall The Base, held jointly with Tainui Group Holdings.
In June, Mackenzie said the company had a three-pronged strategy for success.
"We will stabilise the business in the wake of Covid-19 by embedding strict cost discipline, strengthening the balance sheet and ensuring the resilience of our tenant portfolio. Secondly, we will diversify our portfolio, by expanding our asset mix and creating mixed-use communities at our significant landholdings. Finally, we will grow the business through targeted development," he told the annual meeting.
On the diversification front, Mackenzie said Kiwi would be "reducing pure retail as a proportion of our mix and investigating opportunities to increase our exposure to new asset classes such as build to rent apartments".
Kiwi has long held ambitions to investigate building hundreds of apartments around its Sylvia Park mall at Mt Wellington, giving it a rising perpetual income stream with what will be tenants for life living in its new properties.
It is yet to build one of those apartments and is still looking into it.
Mackenzie said of the city's tenancy scene: "More than half of Aucklanders are already renting and it's taking longer for people to save for a house deposit. Covid-19 is likely to compound these trends, reinforcing build-to-rent's attractiveness as an asset class in New Zealand."
Kiwi shares are trading around $1.27, but did fall as low as 75c in March when the national lockdown occurred.