Shares in Hammerson were up in morning trading on the FTSE 100 after the property development company returned to profit in the half year ended 30 June.

The group reported a pre-tax profit of £335.6 million after making a loss of £818.5 million in the same period last year.

Net rental income in the period fell 10.5 per cent to £140 million, but was up five per cent on a like for like basis. The group said it would be paying an interim dividend of 7.15 pence per share, up 2.9 per cent from the previous year.

Vacancy levels at the group's properties rose slightly from the end of 2009 from 95 per cent to 96 per cent at the end of the first half of 2010.

John Nelson, Chairman of Hammerson, said, "Although our markets have continued to recover from recession over the first half of 2010, the outlook remains uncertain. Against this background we are maintaining a clear focus on improving our portfolio, maximising the income from each of our assets and sound financial management.

"We have made good progress this year in each of these areas. The underlying quality of our portfolio has been demonstrated in our results, with lower vacancy and growing income in a challenging environment. Over the period we have executed a number of transactions which will improve the future growth prospects of our business whilst releasing capital for potential reinvestment. We have advanced our valuable development pipeline in the UK and France which will provide a basis for additional future growth."

By 11:15 shares in Hammerson were up 2.50 per cent on the FTSE 100 to 398.10 pence per share.