City office blocks giant British Land has plunged £1.3 billion into the red as the crash in property values continues to ravage the sector.

However, the group trumpeted news that the City offices market is not completely dead, saying it has signed up a tenant to fill a third of its new 500,000-square-foot Ropemaker Place scheme at Moorgate - with speculation in the City that it may be taken by Bank of Tokyo and its newly acquired ex-Lehman Brothers staff, formerly housed at Canary Wharf.

British Land said underlying profits from letting office space and shops around the country were up marginally to £144 million in the six months to the end of September.

But the bursting of the property bubble saw it take a further year-on-year writedown in the value of its estate of 10.8%, equating to a charge of more than £1.4 billion. Office valuations have plunged more than 13% and retail units 9%. Net asset value is down 22% at 1043p.

Chairman Chris Gibson-Smith said: "Given the severity of the change in circumstances, we are doing well in the downturn. Our lease lengths average 13 years with only 4% of them up for renewal before March 2011. That indicates our resilience in uncertain times, and shows that while we are not immune, we are in a position of strength."