Demand for office space helps offset lower contributions from key units Swire Pacific, whose interests range from property to aviation, said interim profit rose 8 per cent on improved office and retail rents and higher development income. Net profit rose to HK$7.91 billion for the six months to June 30, compared with HK$7.32 billion a year earlier. Underlying profit, which excludes gains from property revaluation, rose 6.77 per cent to HK$3.48 billion. Swire benefited from rising demand for office space in Hong Kong which helped to offset smaller contributions from aviation, marine and other divisions. Retail rents also increased with domestic and tourist demand driving store sales, the company said. Gross rental incomes at Swire Properties rose 4.7 per cent to HK$2.26 billion on strong demand for office properties that include the upmarket Pacific Place development in Admiralty. 'Broad-based demand for office space has pushed rents higher and occupancy has increased with a resultant rise in income,' said chairman Christopher Pratt in the results announcement. Average premium Grade A office rentals in Central's prime business district rose to HK$103.40 per square foot last month, representing a month-to-month increase of 5.9 per cent, according to property consultants Knight Frank Petty. Underlying attributable profit from the property division rose 8.2 per cent to HK$1.54 billion compared with the corresponding period last year, boosted by the sale of a condominium in the United States. The fair value of investment properties rose 24 per cent to HK$5.68 billion from HK$4.58 billion. Construction of Swire's 70-storey One Island East, which started in the first half, would be completed in 2008, the company said. The building, providing 1.5 million square feet, will boost Swire's office portfolio by about 22 per cent. In other business, Cathay Pacific Airways, which is almost 50 per cent owned by Swire, on Wednesday posted a 0.1 per cent fall in net profit to June 30, while earnings at Swire's marine services operation declined 17.42 per cent to HK$346 million. The trading and industrial division - which sells Puma sport shoes, Taikoo sugar and passenger cars - posted a profit of HK$233 million, down from HK$246 million. Earnings from Taikoo Motors Taiwan dropped 33.33 per cent to HK$70 million in the first half as the lower-end car market on the island shrank. The second half will improve, the company said. Earnings per A share were HK$5.17, up from HK$4.79, while earnings per B share were HK$1.03, up from 96 HK cents. Directors declared an interim dividend of 63 HK cents per A share and 12.6 HK cents per B share. Net assets amounted to HK$101.39 billion, little changed from HK$100.77 billion achieved over the same period last year. The A shares, which have gained 17 per cent since February, closed down HK$1.05 to HK$82.50.