Kiwi Property Group has lifted first-half profit 5 per cent as the country’s biggest listed property investor’s rental portfolio benefited from new tenants coming on stream.

Net profit rose to $47.9 million in the six months ended September 30, from $46 million a year earlier.

Rental income rose 9.4 per cent to $95.1 million due to full contributions from H&M and Zara at the Sylvia Park shopping mall in Auckland, and the acquisition of Westgate Lifestyle and The Base in the prior period.

Funds from operations, the company’s new preferred earnings measure which strips out a number of items including fair value movements, rose 14 per cent to $54.2 million.

The property investor didn’t get a tailwind from any fair value gains in its property portfolio, which was valued at $3.06 billion compared to $2.97 billion a year earlier, with the gains from Kiwi Property’s acquisition and development.

The property investor has reaped a total of $304.7 million from fair value gains to its property portfolio between 2013 and 2017, with its last unrealised loss reported in the 2012 March year.

“We have a strategy that favours property exposures expected to outperform, a healthy balance sheet, a pipeline of future development opportunities, and a well-tenanted portfolio with a long weighted average lease term,” chief executive Chris Gudgeon said in a statement.

Kiwi Property has been reshaping its property portfolio selling assets to fund new developments in areas such as Drury south of Auckland and expanding the Sylvia Park mall, and reducing its level of debt to strengthen its balance sheet.

Last week, the company agreed to sell its Majestic Tower office block in Wellington for $123.2 million and is also marketing its North City mall in Porirua, north of the capital city.

The shares rose 0.4 per cent to $1.35, having slipped 2.5 per cent so far this year.