The owner of Britain’s NCP car parks has pulled out of a £1.4 billion Swiss property deal as the global credit squeeze threatens to push the commercial property market which is facing sharp falls in values.

The AIM-listed Delek Global Real Estate, blamed the “continuing uncertainty in the global commercial property market” for its decision to pull out of a deal that was due to be completed in just two days’ time.

Delek’s comments are bound to send shivers through Britain’s £700 billion commercial property market because they coincided with a warning from the Bank of England that the sector could be due for sharp price falls.

Commenting on the effects of the credit crunch, the Bank of England’s latest half-yearly Financial Stability Report, published yesterday, stated: “Recent falls in UK commercial property prices and the more persistent falls in yields, along with the potential for overcapacity given a large pipeline of construction, make this sector particularly prone to further shocks and to rises in the cost of finance.”

Delek struck a SwFr3.4 billion (£1.4 billion) deal at the end of July to buy, with an Israeli property company, 88 buildings in Switzerland from the retail group Jelmoli. The portfolio included the huge Jelmoli department store in Zurich.

The plan involved quickly selling on the Jelmoli Zurich department store for just under £400 million, along with a batch of residential properties and some Geneva assets, to help to pay down debt and invest in development.

Delek had the full support of Merrill Lynch, the American investment bank, to finance the deal, according to Nadav Zohar, the company’s chief operating officer. However, over the past few weeks hopes of securing a quick “flip” of key properties evaporated as new potential buyers of the properties walked away, Mr Zohar said. “Initially we thought that the credit crunch was relatively short-term, but now we think it is a six to twelve-month phenomenon,” he said.

Delek and Igal Ahouvi Group, its Israeli partner on the deal, tried unsuccessfully to cut the sales price by more than 10 per cent. They are thought to have lost a £1.5 million deposit by walking away.

Meanwhile, prospects of a quick sale of Erinaceous, the troubled quoted property services company, were dashed after Consensus Group, the property vehicle owned by Vincent Tchenguiz, said that it had pulled out of takeover talks and had no intention of bidding. In response Erinaceous lost almost a third of its market value.

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