The value of British Land's property portfolio, which includes most of the Broadgate office complex in London, has fallen by £3.2billion, but the group, which raised £740 million through a rights issue in February, said that it remained well within its banking covenants despite the greater-than-expected hit to its asset value.

The 28 per cent writedown in the commercial property giant's portfolio valuation led to net asset value per share falling by 64 per cent to 398p. The FTSE 100 company valued its portfolio, which includes a 50 per cent stake in the Meadowhall shopping centre in Sheffield, at £8.6 billion at March 31, down from £11.8 billion the previous year. Last week Land Securities, its larger rival, said that the value of its portfolio had fallen by 34 per cent.

Chris Grigg, the chief executive of British Land, said yesterday: “The painful part is the valuation decline. I don't see us buying huge amounts of real estate soon.” Nomura analysts described the writedown as “disappointing”. The company's shares fell 8.2 per cent, or 34p, to close at 380p.

Mr Grigg said that the company had spoken to several potential purchasers of all or part of the Broadgate estate, although none of the discussions had come close to a deal. Mr Grigg, who took over from Stephen Hester in December after his predecessor became chief executive of Royal Bank of Scotland, said that there were no “sacred cows” in the portfolio.

As the downturn in retail spending has accelerated, British Land has reduced service charges in Meadowhall by 20 per cent and has allowed some retailers to pay their rents monthly instead of quarterly. About 2 per cent of the portfolio is let to companies that are in administration.

JPMorgan analysts raised the possibility that British Land may raise more equity to add to its property portfolio. They said: “We do not believe that British Land has to tap the equity market again to avoid covenant breach but believe it could be a good idea to issue equity, given the current share price and expected investment opportunities.”

British Land has raised the annual dividend by 3 per cent to 29.8p on pre-tax profits of £268 million in the year to March 31. The profit does not include the dividend from the group's stake in Songbird Estates, the owner of Canary Wharf. The company's £740 million rights issue in February, and the sale of half of Meadowhall and other assets, reduced net debt from £5 billion to £3.2 billion.

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