UPDATE 1-VastNed Retail rental income, properties dip in Q3

* Portfolio value falls 28.9 mln euros

* Direct result down 29.8 pct to 24.19 mln euros

(Adds detail)

AMSTERDAM, Nov 11 (Reuters) - Dutch property group VastNed Retail (VASN.AS) reported sharp declines in rental income and property values during the first nine months of 2008 on Monday, as an economic slowdown hurts its real estate portfolio.

VastNed Retail, which buys and rents properties in the retail sector, said the value of its property portfolio, particularly in Spain, declined 28.9 million euros ($37 million) in the nine months to September. Last year, it rose 180.17 million euros.

VastNed said its investment property portfolio, including those under renovation and due to be added, stood at 2.14 billion euros at the end of 2007.

The real estate company's direct result, which reflects rental income minus expenses, fell 29.8 percent in the nine months to 24.19 million euros from a year earlier, partly due to higher expenses.

For the full year, VastNed said its direct result per share, which is paid out as a dividend, will be between 3.8 and 3.85 euros, compared with 3.85 euros for 2007.

That contrasts with results at Dutch property rival Wereldhave (WEHA.AS), which raised its 2008 outlook after reporting nine-month profit in line with expectations.

Earlier this year, IEF Capital dropped a proposed bid for VastNed Retail worth 1.15 billion euros, blaming weak financial markets. (Reporting by Reed Stevenson, editing by Will Waterman)