Centro Retail Trust (CER) has suffered in underlying profits for the full year ended 30 June 2011 reporting a drop from $160 million from the previous corresponding period to $70 million.

CER CEO Robert Tsenin said the fall is due primarily to CER’s sale of its debt-ridden US investment portfolio in February for US$4.3 billion.

“The sale of CER’s US portfolio was a critically important achievement as it resulted in a significant de-gearing of CER, placing it in a more stable position to continue its restructuring process and consider a range of alternatives,” he said.

However, the company achieved a statutory net profit of $357 million due to improvement in property markets across its Australian portfolio as well as the appreciation of the Australian dollar.

Mark Wilson, Centro general manager of property operations for Australia, said occupancy levels remained near full at 99.5 per cent, specialty occupancy costs were 14.9 per cent and rental growth on new leases during 2011 financial year continued to improve with an average 6.2 per cent increase on new and renewing leases

“Retail sales growth in department and discount department stores has decreased by 3.9 per cent and 3 per cent respectively, contributing to a modest overall increase in portfolio sales,” he said.

“The overall increase in portfolio sales of 1.6 per cent has largely been driven by strong supermarket sales which have performed well off the back of successful marketing campaigns and improved product offerings. Supermarket sales account for 37 per cent of CER’s total sales.”

CER also looks forward to seeing results being produced by its newly listed retail property vehicle A-REIT, a portfolio worth about $4.4 billion.

In August, CER entered into an implementation agreement with Centro Properties Group), more than 83 per cent of Centro’s Senior Lenders and certain Centro managed funds to create.