Commercial property groups were in the spotlight this morning after first half results from Liberty International, the retail-focused real estate investment trust (REIT), posted a 7.4 per cent fall in the value of its portfolio and warned a UK property market revival could not begin before the banking sector recovered.

Chairman Patrick Burgess reflected that the property cycle would now have to run its course with “excesses of the boom years to be purged from the system.”

Moreover, rising bad debts from its troubled tenants meant Liberty slipped to a first-half pre-tax loss of £458 million, compared with a profit of £552 million.

However, the company reassured investors that occupancy levels remained high and that footfall at its shopping centres, which include Lakeside in Thurrock and Covent Garden in central London, had not fallen.

Shares in Liberty, the UK’s third-largest REIT with a £8.6 billion property portfolio, fell 57.5p to 912.5p.

Other property groups such as Hammerson, down 64p to 953p, British Land, down 27.5p to 731p, and Land Securities, down 48p to £13.32, were also hit.

Overall, the FTSE 100 fell 1.3 points to 5453.2, with losses for property and financial stocks mostly offset by rises for the miners.

Old Mutual fell 7.8p to 98.6p after a botched hedging strategy has left the South Africa-based company nursing losses of £107 million.

Standard Life also lost ground, down 11.25p to 233p, after first-half net profit on a European embedded value basis fell 98 per cent, due largely to a fall in the value of its investments.

Lonmin led the blue-chip risers, up £10.91 to £34.10, after Anglo-Swiss miner Xstrata made a £5 billion offer for the world’s third-largest primary producer of platinum.

The bid also boosted Antofagasta, up 23p to 543p, and Vedanta Resources, up 76p to £18.50.

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