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Australian shopping centre giant Westfield, which owns nine New Zealand malls, reported an 18.3 per cent rise in profits last year to A$1.72 billion ($2.1 billion).
However, sales at its properties here and across the Tasman are expected to be flat in 2013.
Westfield's Kiwi assets include Queensgate mall in Lower Hutt, Chartwell in Hamilton, Riccarton in Christchurch and six malls in Auckland.
In the year to December, retail sales at its New Zealand malls rose 0.7 per cent to $2b. Retail sales averaged $8520 for each square metre of floor space, up from $8126 the previous year.
During 2012, Westfield sold three Auckland properties, comprising its Downtown shopping centre, Shore City and Pakuranga.
Its Riccarton mall had the biggest rise in sales - up 3.7 per cent to $215m compared to 2011 when it closed for a few days following earthquakes.
In Lower Hutt, Queensgate sold $158m of goods, 1.5 per cent more than the previous year. Sales were up 2.7 per cent at its Albany store and rose 1.6 per cent at St Lukes.
Its WestCity, Manukau, Newmarket, and Chartwell stores all experienced a decline in sales in 2012.
The 1431 retail shops in its New Zealand portfolio make up 3 per cent of Westfield's total assets under management, alongside shopping centres in Britain, Australia, Brazil and the United States.
Rent it charged retailers to operate from its Kiwi malls was $1123 per square metre, up 2.5 per cent. In 2011, it hiked rents 3.5 per cent following a similar-sized increase in 2010.
The world's biggest shopping centre owner by value, Westfield said sales for its Australia and New Zealand malls were forecast to be about 1.5 to 2 per cent this year, which is at the lower end of analyst's expectations.
Co-chief executive Steven Lowy said Australian retail conditions were subdued for the 2012 year and forecast a similar performance for the next 12 months.
He said it was a combination of a rising savings rate by households, low inflation and a generally cautious consumer.
Lease renewals were flat, while the rent for new tenants was being negotiated at lower levels.
"The December quarter was softer in Australia, but it seemed to bounce back in January," Lowy said.
Analysts said the overall profit result was in line with market expectations. However, the outlook for the Australia/New Zealand portfolio continued to deteriorate while the US portfolio was expected to deliver stronger net operating income growth in 2013 and beyond given improved sales growth.
Simon Wheatley, head of real estate research at Goldman Sachs Australia, said that while the outlook was similar to his expectation and reflected a part period impact from the sale of assest in 2012, "we believe investors may be disappointed by another year of low funds from operations (FFO) growth".
Westfield's net profit of A$1.72b for the 2012 financial year was an 18.3 per cent increase from the previous corresponding period and in line with market expectations. It declared a dividend of 24.75 cents per share, taking the dividend for the financial year to 49.5 cents.
Westfield Group shares were up 1 per cent at A$11.19 in early trade, while Westfield Retail Trust was also up 1 per cent to A$3.17, both outperforming the general market which had added 0.5 per cent.
Westfield Retail Trust, which owns stakes in Westfield's Australian and New Zealand shopping centres, reported a 14.7 per cent decline in the net profit for the 2012 year in what the company said was a challenging operating environment. Westfield Retail will pay a dividend of 18.75 cents.
Macquarie Equities issued an intial "underperform" on the world's biggest retail landlord, after the group warned that sales for its Australian and New Zealand centres were forecast to be flat in the coming year.
Westfield Group also reported earnings before interest and tax of A$2.12b, a 3 per cent increase from 2011.
- BusinessDay.co.nz with Sydney Morning Herald