Shopping mall owner Vicinity Centres beat market expectations, supported by strong rental growth and new leasing deals with its tenants, to post a 14.5 per cent jump in full-year earnings.

However, the company warned retail sales were moderating as higher interest rates and the rising cost of living took a toll on shoppers’ spending habits.

Vicinity’s funds from operations – a key industry metric used for earnings – jumped to $684.8 million, from $598.3 million in the same period a year earlier, and beat analysts’ consensus estimates of $663.4 million.

Full-year funds from operations were 15¢ per security, up from 13.1¢ a year earlier.

Investors welcomed the news, pushing up Vicinity shares more than 3 per cent to $1.90 in late trading on the ASX.

Visitor numbers to Vicinity’s shopping centres climbed more than 30 per cent following a recovery in tourism after the pandemic and as more CBD workers returned to the office.

However, a $338.4 million markdown in the value of the company’s property portfolio tempered the result, with 2.5 per cent to 3 per cent value declines of its CBD retail, regional and neighbourhood assets. The writedowns resulted in the group posting a statutory profit of $271.5 million for the year to June 30, down 78 per cent on the year-earlier period.

The weighted average capitalisation rate – a favourite metric for investors in measuring annual return on an asset – fell by 16 basis points.

Melbourne’s giant Chadstone shopping centre helped offset portfolio losses. A valuation uplift was driven by income growth and recent development completions, including its leisure and entertainment centre, The Social Quarter.