A&J Mucklow looks like being one of the very few property companies that will not have to turn to its shareholders for more capital or seek a special arrangement with its banks.

The value of Mucklow’s portfolio of main Midlands industrial and commercial properties fell by another £44.5 million in the six months to December, taking the total write-downs in the course of 2008 to nearly £70 million.

That lowered the net asset value to £177.4 million or 295p a share, but left Mucklow’s balance sheet geared by a modest 20per cent with net debt of £35.3 million.

At the same time, Mucklow’s net rental income rose to £8.1 million in the half-year to December from £7.5 million a year earlier and 93 per cent of its properties remained occupied.

“We are in a fairly fortunate position in that we didn’t get carried away in better times and borrow the money that was being pushed at us to buy at the top of the market,” said Rupert Mucklow, chairman.

“We are not going to do a deeply discounted rights issue or do deals with our banks.”

The write-down gave Mucklow a headline loss of £38.8 million for the half-year, against one of £11.4 million in the same months of 2007.

“It is not an income loss,” Mr Mucklow stressed.

As a Real Estate Investment Trust, the company has to pay 90 per cent of its income profits in dividends. So last year’s 8.03p interim pay-out costing £4.82 million is repeated.

Mr Mucklow took care not to let that be interpreted as any sort of commitment for the final dividend. “We just don’t know what is round the corner,” he said.

But an unchanged final dividend would give the shares a yield of 7.5 per cent at last night’s price of 235.75p, 0.75p ahead on the day.

The underlying profit, not counting non-cash changes in valuations, or gains from the sale of trading properties, slipped to £5.7 million from £5.9 million last time.

Mucklow sold none of the residential land left over from its days as a house builder in the half-year. With other trading activities, that contributed a £2.6 million profit in the six months to December, 2007.“House builders are not buying and we were not prepared to sell at heavily discounted prices,” Mr Mucklow explained.

It has also backed away from speculative developments. Terms have now been agreed to let the fifth and final unit of the last one, at Yorks, Park, Dudley. Tenants have moved into the other four.

Looking ahead, Mr Mucklow expects conditions in the property market to worsen for the rest of this year. So far it has lost only £300,000 of rent from insolvencies sand been able to increase it rent roll by £500,000.

“It is tough out there for both the landlords and the tenants,” Mr Mucklow said. “We have had seven companies go bust on us in the six months.”

Many more are having cash flow problems, he added. “We are being pro-active with our tenants, delaying payments or agreeing to rents one month in advance rather than quarterly.

So far, though, Mucklow has not had to cut rents.