City property developer Hammerson crashed into the red today as it was forced to write down the value of its property portfolio by over £400 million.

The City offices and shopping centres owner swung to a pre-tax loss of £417.1 million for the first six months of the year, down from profits of £367.8 million for the same period in 2007, as it wiped 9.2% off the value of its UK property portfolio to reflect a fall in commerical properties prices.

This contributed to a slump in net asset value per share - a key measure for property firms - of almost 10% from £15.45 to £13.92.

The company, which converted to a Reit at the start of last year, also took a £17 million hit from the decision by investment banking giant JPMorgan Chase to terminate talks over building its new headquarters on its St Alphage House site. The results sent its shares off 15½p to 973½p.

But Hammerson, which owns Brent Cross and developments across the Square Mile, defied the tough property market to post a 5.4% jump in rental income from £138.3 million to £145.8 million, buoying pre-tax profits without the writedown by 10%, from £54.8 million to £60.5 million.

It continued to report a strong performance from its French division but warns of potential softening in second half. Chief executive John Richards described the performance as "pretty robust given the challenging market environment".

He said conditions in the international debt markets have hit the key financial services industry hard but rents are still holding up.

The industry is also coming under attack from its shopping centres tenants, with retailers calling for rents to be collected monthly rather than before each quarter.

Richards said he would discuss it but "it is a bit rich for retailers to decide to threaten to tear up the terms of a contract they have entered into willingly".

The dividend rose 5% to 12.6p per share.