July 28 (Bloomberg) -- Australand Property Group, the Australian unit of Singapore's CapitaLand Ltd., will seek as much as A$557 million ($532 million) from shareholders after first- half profit dropped 79 percent as property values fell.

Net income fell to A$25.6 million in the six months ended June 30, from A$119.6 million a year earlier, the Sydney-based company said in a statement today. Australand booked unrealized losses in property values of A$7.3 million and wrote down the value of residential developments and joint venture assets by A$34.7 million after tax, according to the statement.

Australand, in which Southeast Asia's biggest developer Capitaland owns about 54 percent, made about half of its revenue last year from home sales, which sagged this year as the Reserve Bank of Australia raised interest rates to a 12-year high. Home- loan approvals fell 7.9 percent in May, the biggest drop in eight years and an index measuring construction work contracted for the first time in four years, according to reports this month.

``Trading conditions remained challenging with consumer confidence being negatively affected by official interest rate rises, escalating oil prices and general inflationary pressure,'' the company said in the statement.

Australand, which had A$775 million of loans maturing before June 2009 at the end of the second quarter, plans a rights offer at 60 Australian cents each to reduce debt and fund future projects.

The company will now distribute 100 percent of property trust earnings to shareholders, it said today.

To contact the reporter on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net

Last Updated: July 27, 2008 20:44 EDT