Mitsubishi Estate Q2 profit falls 18 pct, shares up

* Reports 18 pct fall in July-Sept operating profit

* Keeps full-year profit forecast above market consensus

* Shares up 2.4 pct vs 2.5 pct fall in rival Mitsui Fudosan

* Mitsui Fudosan shares sold after it cut its forecast

TOKYO, Oct 30 - Mitsubishi Estate Co <8802.T>, Japan's second-largest property developer, reported an 18 percent fall in quarterly profit, hurt by weak apartment sales, but it stuck to its full-year forecast for a small rise in profit.

Japan's property market has been hurt by the economic slowdown, with tighter credit making it harder to finance deals. The apartment market has been hit especially hard, forcing many developers to sell their properties at low prices.

Mitsui Fudosan Co <8801.T>, Mitsubishi Estate's bigger rival and the world's fourth-largest property developer, cut its annual operating profit forecast by 20 percent on Thursday, citing valuation losses in its residential property business.

Mitsubishi Estate, which owns the U.S. Rockefeller Group and several buildings in Tokyo's Marunouchi business district, said its operating profit was 29.2 billion yen in the July-September quarter, down from 35.6 billion yen a year earlier.

"We had to sell some of our properties at a discount due to weak market conditions," Mitsubishi Estate Executive Officer Koji Kiyosawa told a news conference.

For the full year to March 2010, Mitsubishi Estate stuck to its forecast for operating profit to rise 2.5 percent to 142 billion yen, above the consensus of 137.7 billion yen profit in a survey of 20 analysts polled by Thomson Reuters I/B/E/S.

Shares of Mitsubishi Estate were up 2.4 percent in afternoon trade, outperforming a 1.3 percent rise in the benchmark Nikkei average <.N225> and a 2.5 percent slide in Mitsui Fudosan, which was sold on its forecast cut.