Shares in Tim Wheeler’s Brixton stumbled this morning after it posted a set of mildly disappointing interim results

The UK’s second largest industrial property owner suffered a 2.5% dip in its 525p share price in early morning trading as investors digested news of its weaker-than-expected 6.3% increase in the value of its portfolio in the first six months of 2006.

Analysts said they had expected Brixton outperform the IPD Industrial growth Benchmark of 6.2% by a much higher margin. The company also failed to build upon last year’s pre-tax profits despite the increase in the value of its portfolio – now valued at just under £2bn. Brixton said its reduced profitability was driven by a flurry of disposals in the first six months of 2006 that forced its net rental income down 11.8% to £44.1m.

But in better news, Brixton’s adjusted NAV continued to climb, rising 6.2% to 514p a share compared with an NAV of 422p a share at 30 June 2005.

Wheeler commented: ‘Brixton has sold £520m of property so far this year – capitalising on the success of the Industrious purchase by creating £70m of surplus value in 15 months. Whilst the transitionary reduction in size of the business has had an effect on come comparator numbers, capital growth and investment profit are healthy.’

Some market observers also expressed concern over Brixton’s bulging capital reserves and extremely low gearing level, which had led some to argue that investors are missing out on growth in the industrial investment market while unspent cash sits in the bank.