Wellington, Nov 25 NZPA - The National Property Trust lifted its half year distributable profit 1.5 percent to $4.85 million, despite having a smaller portfolio than a year ago.

After allowing for a $4.4m unrealised loss in property valuations and a $4.4m loss on sale of investment properties, the trust's net loss for the six months to the end of September was $9.03m, compared to a $9.3m loss a year earlier.

Previously, the trust said the total value of its portfolio of commercial, retail and industrial properties had decreased by 2.2 percent to $196.7m, after allowing for asset sales and capital spending.

Today the trust said its net asset backing per unit had dropped, as the result of property sales and revaluations, to 71.78c at the end of the period from 79.8c at March 31.

A 1.125c per unit dividend distribution had been recommended for the September quarter, bringing the 2009 financial year-to-date distributions to 2.25cpu, in line with the targeted distribution for the full financial year of 4.5cpu.

John Crone, general manager of trust manager The National Property Trust Ltd, said property values appeared to have stabilised in the past six months.

"While we believe that the office rental market will be under pressure over the coming 12 to 18 months we also consider that the trust can continue to deliver further rental growth as the portfolio is currently under rented by an estimated 9.84 percent," he said.

The portfolio's occupancy rate at September 30 was 95.83 percent, from 96.6 percent at the start of the financial year.

In line with its capital management strategy of reducing debt and rebalancing the property portfolio, retail properties in Auckland and Tauranga were sold, the trust said.

Proceeds from the settlement of $62.05m, part of it shortly after the end of the period, had been used to reduce a BNZ term loan resulting in a conservative gearing ratio of 22.5 percent.