Development Securities saw its profits fall last year because of the downturn in commercial property values. Financial Times

It warned that conditions remained challenging, with risks over the future of occupational demand replacing the cyclical downturn in the investment market.

Even so, the company’s results are stronger than its peers in the property sector owing to the success of a more cautious business strategy.

Development Securities generally sells its developments prior to completion, minimising direct exposure to the market, and its investment portfolio is mostly based round suburban shopping centres, which have performed better than many areas of the property market.

Development Securities reported a pre-tax profit of £244,000 in 2007, compared with a profit last year of £22.8m, while earnings per share were flat, having reached 63.4p a share last year. As at December 31, its net assets were £228.9m, down from £231.4m the previous year.

The company’s investment portfolio fared better than most, with a 3.7% total portfolio return, compared with the IPD all market return of minus-3.4%.