ALE Property Group chief executive Andrew Wilkinson has defended the trust's decision to borrow money to fund a higher distribution payout, after the country's biggest owner of freehold pubs reported a fall in operating profit for the six months to December.

The owner of a $1.1 billion portfolio of 86 pubs leased to Woolworths-backed operator ALH reported distributable interim profit of $14.6 million, down from $15.1 million a year ago due to higher debt levels (to fund the higher distribution), increased management costs and weak income growth from its inflation-indexed rent agreements.