Carrefour, Europe's largest retailer, is understood to be considering abandoning its plan to float its property assets and instead sell two of its discount supermarket chains.

The €3 billion (£2.2 billion) property initial public offering (IPO) was announced in August under pressure from activist investors who were pushing for increased shareholder value.

But, in a sign that the property market is cooling in Europe, the French group is planning instead to to sell Dia and ED, which operate in Europe, the US and Asia.

Les Echos reported this morning that Rothschild has been appointed to work on the sales.

The discount chains are expected to return operating profit of €450 million this year, on sales of €7.5 billion.

Carrefour had hoped to sell about 20 per cent of its property vehicle after coming under pressure from the US private equity group Colony Capital and the luxury brand owner LVMH. The two own a combined 9.1 per cent stake.

DTZ, the property advisory group, said this week that the decline in property investment markets was spreading from the UK to continental Europe.

In the UK Friends Provident froze withdrawals from a flagship £1.2 billion property fund after a sharp fall in commercial property prices.

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