UPDATE 1-Mitsubishi Estate Q1 profit up 48 pct, keeps outlook

TOKYO, July 31 (Reuters) - Mitsubishi Estate Co (8802.T), Japan's second-biggest property developer, posted a 48 percent jump in quarterly profit on solid revenues from office rents, and kept its full-year forecast for 10 percent growth.

Mitsubishi Estate has been cashing in on strong demand for office space, cutting vacancy rates in buildings it owns in central Tokyo to almost zero.

The tight office market situation has also allowed rival Mitsui Fudosan Co (8801.T) to drive up rents in Tokyo's busy business district, helping them weather a tougher environment for much of Japan's property market, which has been hit by tighter credit and weak apartment sales.

Mitsubishi Estate, which owns the U.S. Rockefeller Group as well as more than two dozen buildings in Tokyo's Marunouchi prime business district, had April-June group operating profit of 39.95 billion yen ($370 million) versus 26.90 billion yen a year earlier.

Group sales jumped 39 percent to 209.8 billion yen.

Japan has seen a string of failures of midsize property companies in the past few months as banks rein in credit to a sector hit by sluggish sales of apartments and seen as risky as the world's second-largest economy slows.

Mitsubishi, however, has a relatively limited exposure to the apartment market with two-thirds of its profit coming from its office and building leasing operations, a highly stable earnings driver even in an economic downturn.

For the year to March, the company stuck by its forecast for an operating profit of 196.5 billion yen, which is in line with the market consensus. It also reiterated its estimate for sales to jump 36 percent to 1.07 trillion yen.

Shares of Mitsubishi Estate, worth about $33 billion, have gained about 8.5 percent since April, in line with an 8.2 percent gain in the real estate industry subindex .IRLTY.T.

Mitsubishi Estate shares were trading up 0.2 percent at 2,655 yen as of 0421 GMT on Thursday. The real estate subindex was down 0.7 percent. (Reporting by Mariko Katsumura; Editing by Ian Geoghegan)