Brixton Estates today unveiled a £237 million loss and resorted to the lyrics of Bob Dylan to describe the “apocalyptic” mindset of the UK commercial property market.

The company, which dominates the West London industrial market around Heathrow and Park Royal, fronted its interim results with a picture of the four horsemen of the apocalypse, and quoted one of the gravelly-voiced folk legend’s songs to illustrate the current state of the property industry.

Brixton said: “The opening lines of Bob Dylan’s All Along the Watchtower seem to capture the beleaguered mindset of the UK commercial real estate market.

“There must be some way out of here, said the joker to the thief. There’s too much confusion, I can’t get no relief”

Brixton went on to give warning that the dual impact of an intensifying economic slowdown and the credit crunch had left the sector unable to ascribe accurate valuations as the market plunges.

“There is confusion — and an element of denial — over direct property pricing due to lack of transactions,” it said.

Tim Wheeler, chief executive of Brixton, adopted the metaphor to compare equity-based opportunist buyers with "thieves" and owners who would not sell to "jokers", claiming there is no solution until distressed properties appear on the market.

Brixton reported that its property portfolio has fallen in value by 10 per cent during to first six months of the year to £2.2 billion. Brixton's adjusted net asset value also declined by 18 per cent.

Shares in Brixton fell 8 per cent to 227.75p after it revealed that a £192.3 million profit in the first half of last year had turned into a £236.7 million loss for the six months ended June 30.

The group, which owns or manages more than 19 million sq ft in more than 1,300 units, said the company’s continued exposure to high business rates, including on empty properties was another factor weighing on profitability.

It said that during the steep current downturn, this represented a further acute financial burden, although it claimed this situation was increasingly viewed as politically unacceptable.

Nevertheless, despite the collapse in profitability, Brixton reported a 13.5 per cent rise in net rental income to £39.4 million.

The company also suggested that conditions could start to improve next year and that Brixton was well positioned to take advantage of sales of distressed property assets. It said that it had ceased big new developments, such as the Guinness Brewery, until conditions improved.

“So what is the “way out of here”? We believe that the sector could start to stabilise and recover if increased volumes of secondary and tertiary stock are traded in the next 6-12 months as distressed property starts to be made available. Initially, this should enable a return to more appropriate mark-to-market pricing."

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