Aug. 27 (Bloomberg) -- GPT Group, an Australian property trust, said its first-half loss widened after booking writedowns on property assets and a joint venture in Europe.

The net loss for the six months to June 30 was A$1.2 billion ($1 billion), compared with a A$67.7 million loss a year earlier, according to a statement from the Sydney-based company today. Operating profit declined 22 percent to A$183 million, the company said.

“The impact of the credit crisis on the real estate environment, and markets globally, has continued to create challenges in operating conditions, however the outlook for real estate in Australia is improving,” Chief Executive Officer Michael Cameron said in the statement. “Whilst we expect that it is likely that there will be further valuation pressure on assets over the second half, we believe that the pace of the devaluation cycle is slowing.”

GPT, along with rivals such as Centro Properties Group, invested in U.S. and European properties which were amongst the worst hit when global property values tumbled and borrowing costs spiked due to the credit crunch. The company is selling all its overseas assets, it said Aug. 6, and raised A$1.7 billion in May to bolster its balance sheet.

GPT’s first-half writedowns of A$1.87 billion include a A$1.1 billion loss on its European joint venture with Babcock & Brown, and follow A$2.15 billion of writedowns in 2008, which were reported in February.

The company, which had its credit rating raised to BBB+ from BBB yesterday by Standard & Poor’s, will pay a dividend of 2.5 Australian cents per share, it said.

GPT expects a full-year operating profit of A$365 million, it said.

GPT shares rose 0.9 percent to 58 cents at 10:35 a.m. in Sydney. They have fallen 27 percent this year.

To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net.

Last Updated: August 26, 2009 20:48 EDT