Land Securites is expected to lay bare the full extent of the commercial-property bloodbath this week when it puts plans for a demerger on ice and unveils a shock 20% drop in the net value of its assets.

A virtual shutdown in commercial-property lending has combined with falling occupier demand and a steep decline in rents to push values down sharply since the collapse of Lehman Brothers in September. Analysts were this weekend slashing forecasts for Land Securities’ half-year results to show a fall of more than 20% in its net asset value per share from £19.56 to between £15 and £16.

They expect the group’s £13.6bn portfolio of shops and offices to have plunged in value by between £1.5bn and £1.7bn to about £12bn.

Nomura analyst Mike Prew said: 'The eye of the debt storm and tenant recession is now passing through real-estate markets.'

Sunday Times