Liberty International announced a slowdown in capital growth but an increase in profits today.

First half results for the shopping centre REIT showed capital growth in the company’s UK regional shopping centre portfolio slowed from 1.9% in the first quarter of the year to 0.69% in quarter two, in line with growth across the industry.

Total returns also decreased for the period, to 6% from 8%, with this figure taking into account the REIT conversion charge.

The results also showed a 16% increase in pre-tax profits on the same period in 2006, to £67m.

The company’s net asset value rose to £5.2bn from £4.5bn in the same period last year, and adjusted and diluted net asset value rose to 1385p from 1268p a share.

Liberty chairman Sir Robert Finch said: ‘In our opinion, prime regional shopping centres continue to be a very attractive sector of the UK property market on a long-term view and are currently valued on an extremely defensive basis when compared with other sectors.’

In an analyst note, Harm Meijer of JP Morgan said: ‘We believe this is a fair comment and point to the scarcity value of Liberty's regional shopping centre portfolio, defensive cash flows and long track record.

‘However in the near term slowing capital growth, rising interest rates and negative sentiment towards UK retail are set to weigh on the stock.’