GPT Group continues to face challenging conditions in its retail portfolio but believes its earnings growth guidance will be maintained of at least 5 per cent for the year to December 31.

The property group reported a net profit after tax of $257 million for the six months ended 30 June 2013, down 6.7 per cent on the same period from the previous year. It blames a lower valuation uplift of some its assets.

Currently worth $4.5 billion, the retail portfolio delivered a 1.5 per cent comparable income growth. The company said the lower growth was primarily driven by the continuation of negative leasing spreads associated with remixing the portfolio. Retail sales continued to show modest growth with specialty sales increasing 1.1 per cent.

Also, the total return for the retail portfolio for the 12 months to 30 June 2013 was 7.1 per cent, impacted by negative revaluation movements at Charlestown Square and Dandenong Plaza.

GPT head of investment management Carmel Hourigan said in response to challenging conditions in retail, GPT remains focused on active asset management to drive long term performance for investors.

GPT continues to make progress on its reweighting strategy over the period with the sale of its 50 per cent interest in Erina Fair and the remainder of its Homemaker portfolio. Retail now represents 53 per cent of the portfolio, down from 61 per cent 18 months ago.

Also, the major expansion of Highpoint Shopping Centre opened on scheduled and fully leased in March 2013. According to GPT, the centre has been performing ahead of forecasts since opening with a 30 per cent increase in foot traffic. The centre has achieved a revaluation uplift of $140 million to date, delivering a strong total return for GPT and its joint venture partners.