Property loan stock Vukile boosted net profit available for distribution by 25.8% to 124.4 million rand in the six months to September 2007, on the back of a 9.2% increase in rental income on the core portfolio and a reduction of finance costs by 19%, it reported on Monday.

The board has approved an interim distribution of 40.25 cents per linked unit, up 12.6% on the distribution at the halfway mark in 2006.

The value of the company's property portfolio topped the 4 billion rand mark, reaching 4.35 billion rand at end September 2007, reflecting the continued strong growth in property values in addition to its acquisition and development programme.?

Net asset value per linked unit was 892 cents on 30 September (2006: 710 cents), a discount of 25.7% to its linked unit price on that date.

CE Gerhard van Zyl noted that the company had continued to improve its portfolio's overall vacancy profile, which decreased from 2.9% to 2.5% in the six months from its March year-end to the end of September 2007.

About one-third of the leases in its portfolio will expire in the next 12 months, providing opportunities to take advantage of rising rentals, particularly in the office and industrial sectors.

As virtually all of Vukile's debt is hedged or fixed, recent and possible further interest rate increases would have very little impact on its cost of debt, it said.

With regards to the recent cautionary announcements issued by the company, Van Zyl said that an announcement in this regard would be made in due course.

"With favourable trading conditions in the commercial property market generally expected to continue, and our sustained emphasis on enhancing the quality and returns of our portfolio, we are confident that Vukile is on track to meet its budget to deliver distribution growth for the year to March 2008 in line with the growth of the previous year," Van Zyl said.