British Land has taken a £1.4 billion writedown on its portfolio.

Property group British Land revealed on Thursday that the impact of the global credit crunch has wiped £1.39 billion off the value of its portfolio in just three months – the company’s first asset loss in 14 years.

In its Third Quarter report, the company said the value of its assets dropped 8.9% in the three months ending December 31 – resulting in a net asset value per share down 16.7% to £14.01, and property portfolio value standing at £18.4bn.

The global credit crunch has caused commercial property values to fall steeply in recent months, after something of a sharp halt to a previously booming market; equally lending conditions have tightened, debilitating major property deals.

Chris Gibson-Smith, Chairman, said: “Macro-economic uncertainty and the global credit crunch have depressed property values. However, the worst should now be behind us, though uncertainties remain on timing and extent of the correction.

“The exceptional quality of prime property cashflow is again representing clear value. We are optimistic about British Land’s inherent strengths and ability to create value over the course of the business cycle.”

The same drop in property values has caused some property funds to defer redemptions as investors flocking to retrieve their money have put pressure on funds to sell assets.

British Land reported that its properties were 99% let with an average lease life of 14 years, and it had sold £600m of properties since September. Properties currently being developed and due for completion by the end of this year had 74% of their space pre-let, sold or under offer.

Underlying pre-tax profits rose from £64m to £72m in the quarter. The group increased the dividend for the quarter from 6.5p to 8.75p and said it was on target to pay a total for the year of 35p.

In opening trading on Thursday, British Land shares rose 17p or 1.8% to 979p, 30% below the asset value, suggesting that investors had feared an even larger writedown.