The global credit crisis has smashed property values and Meadowhall has lost nearly 10 per cent of its value over the year to stand at £1,505m, but the pace of decline is slowing as commercial property prices start to pick up.

British Land, the UK's second biggest property company, said the value of its entire portfolio fell 10 per cent in the year to March 31, but it fell by only 2.2 per cent in the final quarter, raising hopes that the year-long property slump is bottoming out.

Despite the slump in its value, Meadowhall has seen good trading with strong demand from retailers and higher visitor numbers than the national average.

Meadowhall's rental values grew by almost three per cent, a much higher rate than elsewhere in the country.

The 1.5 million sq ft regional shopping centre at Sheffield has let over 30 new shops and secured more than 240,000 sq ft in lease renewals.

Following the exceptional flooding in the Sheffield area last June, 130 stores on the lower level have been refitted and the cinema complex has been refurbished.

Terms have been agreed with Topshop for a new 40,000 sq ft flagship store and the new 165,000 sq ft two level mall, known as The Gallery, has attracted leading retail names such as Next and Primark.

Together with a number of key new lettings to retailers such as All Saints, Hobbs, Puma, Henleys and The Pier, this has created a broader retail offer than ever before.

British Land posted better than expected full-year results yesterday with an 11 per cent increase in underlying pre-tax profits to £284m

The shares rose one per cent, a rise of 8.5p, to close at 796.5p.

Chief executive Stephen Hester commented: "I'm pleased to say that despite difficult conditions we have managed to outperform."

The company made £3.2bn of gross property sales and Mr Hester reported an increase in investor interest as buyers who vanished during the credit crunch slowly return to the market.

The group has £2.4bn of undrawn borrowing facilities to support its development programme and exploit investment opportunities, but it has no current plans for acquisitions or disposals.

Mr Hester declined to comment on reports it was thinking of selling one of its prize central London properties, The Willis Building, for up to £400m.

British Land owns and manages assets of £17.9bn. In addition to Meadowhall, the portfolio includes the Broadgate Estate, a four million square foot office campus in the heart of London's financial district.

At the end of last year the group announced it was postponing plans to sell part of Meadowhall due to uncertainty in the financial markets. It believes it is unlikely to achieve a decent price for a stake in the shopping centre until prices pick up again.

The group had hoped to sell between 50 per cent and 75 per cent of the shopping centre.

British Land is working with Sheffield City Council on the planning of the land it owns adjacent to the centre. The proposals include offices, residential and car showroom facilities.

The company's £135m St Stephen's shopping centre in Hull opened for trading in September.

The centre is anchored by a 146,000 sq ft Tesco Extra and it includes a wide covered "street" with a further 420,000 sq ft of retail and leisure accommodation.