Wellington, Aug 19 NZPA - ING Medical Properties Trust reported a 2.3 percent fall in full year operating profit to $11.8 million.

The result for the year to the end of June was due to the continuing leasing up of the recently completed Ascot Central building and a rise in the trust's cost of debt, trust manager ING Medical Properties Ltd (IMPL) said today.

As the result was in line with earlier projections, a fourth quarter distribution of 2.125 cents per unit was confirmed.

The final quarter payment took the distribution for the full year to 8.5cpu, in line with target guidance given a year ago.

IMPL chairman Bill Thurston said the focus remained on enhancing the trust's core portfolio position and ensuring its balance sheet retained a conservative profile in the current climate.

So far, that strategy had been achieved through the disposal of two lower value, or non-core assets in the latter part of the 2009 financial year, Mr Thurston said.

During the financial year the trust's gross rental income rose 9.7 percent to $23.8m, while the average increase in rents reviewed was 4.1 percent.

Occupancy levels improved throughout the portfolio to 98 percent, from 94.3 percent a year earlier.

Following a market-driven decline in portfolio revaluations of $7.1m, and mark-to-market interest rate swaps revaluation decline of $8.7m, the 2009 net loss after tax was $2.2m compared to a profit of $8.6m the year before, IMPL said.

The trust's portfolio was expected to perform well in the coming year with gross distributions projected to increase.

A 2010 cash distribution range of 8.4cpu and 8.6cpu was forecast.

Assuming market conditions remained generally stable and no material unforeseen portfolio events or tenancy defaults occurred, the IMPL board would target a cash distribution of 8.5cpu for 2010.