Spanish property group Colonial, which is struggling under huge debts, reported a €2.38bn (£1.9bn) first-half loss as the value of its assets tumbled.

The net loss compared with a profit of €316m a year earlier, as Spain’s decadelong property boom ended.

Colonial has written down the value of assets, including €800m for a 15% stake in construction company Fomento de Construcciones y Contratas.

The company bought the FCC stake in 2006 for €78 a share. The stock currently trades around €34.

'The rest of the write-down mainly corresponds to negative property valuations and the adjustments registered between the market value and the book value of the company’s assets,' Colonial said in the statement.

Societe Fonciere Lyonnaise, the French real estate investment trust controlled by Colonial, reported a loss in July of €181m for the first half after the value of its assets declined.

Daily Telegraph