British Land, the FTSE 100 property developer, has warned of price falls in Britain’s £700bn commercial property market and expects several rival office schemes planned for the City to be delayed or scrapped.

Delivering a robust set of figures for British Land’s own £16bn property portfolio, Stephen Hester, chief executive, said “a realignment in retail (property) is going on”, and warned of price falls that are bound to occur in the office sector.

Mr Hester added: “Certainly there will be realignment in offices. I am not saying when. But it is the reason we have been the biggest seller of office space. Some offices are overvalued and in some cases people have on spectacles that are too rosy.”

Even so, British Land is pressing ahead with the construction of the Leadenhall Building. The group has yet to find a tenant for the 225m skyscraper that has been dubbed ‘the cheese-grater’. It will cost £286m but will not be ready until 2011.