St Modwen has written down £16.9 million from its commercial property portfolio.
The regeneration specialist returned weak half-year profits and will sell some of its land to help balance its loss.
It claimed everyone had been "caught by surprise" with the faltering land prices but cautioned: "Prices are still falling and people haven’t called the bottom there yet," said chief executive, Bill Oliver.
The group’s shares fell by more than two per cent following the announcement, and its net asset value fell by almost £20 million to £448.2 million.
St Modwen also said the worse was yet to come in the residential and commercial property markets, with both set to deteriorate.
Its report was in stark contrast to last year when a record pre-tax profit of £65.1 million was announced.