With rising tenant demand and new developments, such as 151 Clarence Street in Sydney, net effective rents are rising, as the level of incentives declined over the six months to December 31, 2106.

Investa is also engaged in a battle for control with its largest shareholder, Cromwell Properties, and said at its results presentation that the IOF manager is willing to continue in discussions with Cromwell, but will only provide additional information to Cromwell if it signs a confidentiality agreement.

Cromwell, which reports on Friday, has 9.84 per cent of Investa and has said it sees value in IOF of $4.45 per IOF security, being Cromwell's initial proposal and up to $4.75 per IOF security. However, it has not made a formal offer.

"Following the determination not to grant Cromwell comprehensive due diligence, the independent directors have been in regular discussions with Cromwell and are willing to provide Cromwell with limited confidential information in order to facilitate Cromwell being in a position to provide IOF unit-holders with an all cash proposal which is compelling and attractive," IOF's manager said.

For the half, IOF's statutory profit declined by 20.2 per cent, to $224 million, but was  higher than usual revaluations in the 2015 half due to some foreign exchange movements and derivative fluctuations.

Excluding the one-off charges and large comparative revaluations, the funds from operations, being the more accurate measure for real estate investment trusts, rose 1.4 per cent to $91.3 million.

IOF's fund manager Penny Ranson said due to the solid office markets of Sydney and Melbourne, like-for-like net property income growth is anticipated to exceed 5 per cent.

Combined with a lower debt balance, the full year 2017 FFO guidance has been upgraded from 29¢ to 29.5¢ per unit, a 3.1 per cent increase on 2016. Distribution guidance has been increased from 20¢ to 20.2¢ per unit, being an increase of 3.1 per cent in the previous year.

The interim distribution was 10¢.