The chief executive of Hammerson, the FTSE 100 developer, said yesterday that prices of commercial property were likely to fall by 10 per cent by June, bringing the total decline to 20 per cent in 12 months.

John Richards is the first head of any of Britain’s top developers to try to quantify how much farther the £700 billion commercial property market has to fall. His comments came after warnings this month from Liberty International and British Land that the investment market remained weak.

Mr Richards said that Hammerson was sitting on about £600 million of undrawn borrowings set aside for acquisitions and developments, but that prices were not right to start a spending spree to add to the company’s £7.3 billion of shopping centres and city offices.

Hammerson wrote down the value of its own portfolio during its second half to December 31 by 5.5 per cent, equivalent to a £457 million decline. That compared with “broadly a 10 per cent fall in values during the second half of last year”, Mr Richards said. “There is potential for another 10 per cent fall in the market this first half. We expect to outperform by the same margin as we did in the second half.”

Hammerson and Kajima, its Japanese joint venture partner, also announced the widely forecast sale of the leasehold interest in One London Wall - where a big tenant is Deutsche Bank - for £136 million to Hansainvest, a German insurer. The building was valued a year ago at £160 million. Hammerson’s valuation deficits pushed annual pretax profits to £110 million at December 31, down from £792 million in 2006.

The company partially offset the drop in capital values of its buildings with better-than-expected rises in rental income in Britain and France. Like-for-like rental income rose 7.7 per cent. New buildings ready for occupancy pushed total annual revenue to £275.7 million, up from £237.4 million at the end of December 2006.

One property firm feeling the pressure is Minerva, which has hefty exposure to two speculative City office schemes, including The Walbrook, which Skanska is building, and a transformation of the centre of Croydon.

The company wrote down its investment portfolio by 14.4 per cent during its first half ending on December 31 – equivalent to a £108 million markdown.

Net rental income over the period was fractionally down to £4.1 million. The result is Minerva was left with £114 million of interim pretax losses, compared with £15 million of profits during the same period a year ago.

Its net asset value per share tumbled from 327.9p in June to 266p, although the company remained bullish about prospects.

“Despite the uncertain market conditions, we have a robust balance sheet, funding in place for our key developments and a strong cash position to take the business forward,” Salmaan Hasan, the chief executive, said.

Activities in high-end residential property, which has shown strong growth in the period, have helped to offset the impact of weakening yields in the commercial sector. “The difficulties facing developers in the financial markets have also reduced the potential supply of speculative developments, particularly in the City of London,” Oliver Whitehead, the Minerva chairman, said. “As a result, our major projects in the City are expected to be delivered into a more supply-constrained environment from 2010 onwards.”