Property For Industry is an interested, if cautious, buyer of industrial property in a market where rising valuations helped lift the firm's first-half profit by 57 per cent.

The industrial property investor reported a profit of $46.4 million in the six months ended June 30, up from $29.6m a year earlier. That included a $23.4m tailwind from revaluations on its $1.37 billion property portfolio, up from a $7.9m gain the year earlier.

PFI has 94 properties, of which 84 per cent are in Auckland and 87 per cent are industrial. It's selling non-industrial properties, such as a mixed-use site in Albany with a book value of $28m, and plans to recycle that capital into high quality industrial properties in sought-after areas.

However, with capital values at record highs, chief executive Simon Woodhams told analysts the company has a "cautious view of buying property."

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PFI is still making acquisitions, such as a $17.2m sale-and-leaseback transaction with truck and trailer parts supplier Maxitrans, and a $34.2m development in Mangere for warehouse operator Supply Chain Solutions.

The real estate investor's passing yield fell to 6.09 per cent from 6.21 per cent a year earlier due to valuation changes, and CBRE estimates prime and secondary industrial yields are respectively 5.17 per cent and 6.08 per cent.

Woodhams said the market has firmed over the past six months, with sales evidence showing a capitalisation rate of sub-5 per cent. A lower cap rate indicates a higher value.

The shares were unchanged at $2.295, with more than a million shares changing hands for the first time since late March.

The board declared a second-quarter dividend of 1.8 cents per share, payable Sept. 4 to registered shareholders on Aug. 26. That first-half dividend of 3.6 cents per share was in line with a year earlier, and PFI maintained guidance for an annual payment of 7.6 cents, up from 7.1 cents in 2018.

Adjusted funds from operation, which are used to set the dividend, rose to $20.5m from $17.5m a year earlier. Net rental income rose 4.3 per cent to $41m.

The property owner's occupancy rate improved to 99.7 per cent from 98.1 per cent a year earlier, and the weighted average lease term rose to 5.71 years from 5.39 years.

Woodhams said despite the caution in the economy, most of PFI's 147 tenants seem content, and that the company's low level of accounts receivable was a good indication of that.

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"Everyone is paying their rent and seem pretty happy," he said.