The warning from Mr Courtauld follows similar statements from fellow chief executives Francis Salway and Mike Slade yesterday, as global economies face concerns over sovereign debt and spending cuts.

Capital values have rebounded sharply in the UK since last August – after falling 44pc in the previous two years – as a wall of equity from cash-rich foreign and UK investors targeted the market.

“London’s property investment markets continued to recover during the quarter although at a lesser pace than the unsustainably high rates of the previous two quarters,” Mr Courtauld said. “We expect this less urgent mood to persist for the balance of the year with investors looking to rental growth to support further price increases.”

However, the Great Portland boss down played the severity of any fall in capital values. “The market was always going to do this. We saw this in the 1990s,” he added. “Fundamentally, London is not overvalued, and over the next three years there is going to be an acute shortage of space.”

Great Portland has acquired £322m of property since last May, but Mr Courtauld said the company was now likely to pull back from deals until later in the year. However, it is pushing on with a 1.6m sq ft development programme and is making “good progress” on refining the plans and seeking a pre-let for its major City tower at 100 Bishopsgate.
The shares rose 5.5 to 301.7p.