The value of Landsec’s real estate portfolio dropped by 1.4% in six months as the UK’s largest listed real estate company prepares to develop £2bn (€2.3bn) of projects and launch a flexible office brand.

Landsec’s net asset value fell by £188m, or 1.4%, to £14bn between March and September, caused by decreasing values of its retail and hotel assets. Its London office portfolio rose by 0.4%.

The UK real estate investment trust said higher net rental income and lower costs helped increase pre-tax profits during the six months by £42m – up 23.5% on the same period last year.

The FTSE 100 company said its London office development pipeline rose to 2m sqft of space with an estimated cost of £2bn.

It will also launch a flexible office product next year at 123 Victoria Street, following in the footsteps of rival REIT British Land which launched Storey last year.

“Landsec has delivered a robust performance in an uncertain market,” said CEO Robert Noel.

“With healthy growth in earnings per share and a strong financial position, we are looking forward with confidence, introducing new concepts and growing our pipeline of development opportunities.”

He added: “In London, we’ve expanded our pipeline of office development opportunities to £2bn and will be launching a new flexible office product in the new year, catering for increasing customer demand for flexible, serviced solutions.

“We remain alert to market risks but are confident in our current positioning and excited about the future.”

At midday, Landsec shares in London traded traded 1.1% higher a 861.80 pence, valuing the company at £6.32bn