British Land's portfolio valuation was down by 5% this quarter and it has posted losses of £572M before tax.
It said economic concerns and inflation on long-term interest rates were an important factor in its performance, but also blamed over reaction by investors to recent news coverage of the 'Credit Crunch'.
In the near future it is looking to review the construction schedule of 122 Leadenhall, a major London project already underway, to suit demand and market conditions, known as the 'Cheesegrater' due to its wedge-shape.
According to British Land chief executive Stephen Hester, on-site: "Demolition and preparation of the sub-structure is proceeding satisfactorily; we are reviewing timing of construction and target completion in order to optimise cost and occupational demand."
However British Land remain optimistic in the long term, saying that there is substantial capital waiting on the sidelines for 'cheap' opportunities.
British Land has weathered some turbulent market conditions over the last year but this quarter saw underlying profits up by 23% and share dividends up by 7% to 9.375 pence.
Its property portfolio is 98% let, with 3.3 hectares new lettings in the quarter.
"These first quarter results demonstrate British Land’s resilience in the face of a weak economy
and gloomy market sentiment," said British Land chairman Chris Gibson-Smith.
"While values are marked down in a thin market, our prime assets – buildings and customer contracts – provide strength in difficult times and opportunity when the cycle turns."