"Conditions in London's property investment markets remain difficult,'' Great Portland said today in a statement. "We expect the constrained availability of credit to exert further downward pressure on property values, particularly those with limited rental growth prospects."

Demand for office space in London has fallen as banks and other financial-services companies cut jobs in response to a slump in the industry. At the same time, slower economic growth in the U.K. has contributed to a drop in retail-property values.

The value of Great Portland's buildings, most of which are in the West End of London, fell 4 percent in the three months through June, the company reported today. Net asset value declined 6.3 percent to 553 pence a share.

Great Portland fell 7.25 pence, or 2.1 percent, to 344 pence in London, giving the company a market value of 623 million pounds. The shares have dropped 31 percent in six months, while the FTSE 350 Real Estate Index has lost 23 percent.

The number of inquiries for commercial space has dropped by as much as 15 percent this year, Chief Executive Officer Toby Courtauld said today in an interview.

"It has not dried up totally," he said. "People are taking more time."

Great Portland has "very little vacant space and very little development space to let," according to Courtauld. That, coupled with rents for its properties that are lower than average for the West End, make the company less vulnerable to falling real-estate values, he said.

Source: Bloomberg