Property loan stock company Vukile Property Fund has had a bumper year.

The company’s net profit increased by 25.8percent to R124-million in the six months to September, helped by a 9.2percent increase in rental income on properties in its core portfolio and a 19percent reduction in finance costs.

The Vukile board has approved an interim dividend of 40.25c per linked unit, up 12.6percent from the corresponding period last year.

Chief executive Gerhard van Zyl said: “With favourable trading conditions in the commercial property market 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.”

The company’s property portfolio reached R4.3-billion at end of the period. Vukile took advantage of increasing property values and benefitted from its acquisition and development programme.

Van Zyl said the company had continued to improve its portfolio’s vacancy profile, which decreased from 2.9 percent to 2.5 percent in the six months from its March 2007 year- end .

About a third of the leases in its portfolio will expire in the next 12 months, providing opportunities to take advantage of rising rentals.

As virtually all of Vukile’s debt is hedged or fixed, recent and further interest rate increases will have little impact on its cost of debt.

The company’s share price dropped 0.80 percent in yesterday’ s trade.