The firm revealed today that it planned to sell office investments over the next few years to plough returns into shopping centres.

It decision means that the £290m Principal Place will be the last office and residential for the foreseeable future

The Bishopsgate mixed-use scheme had to be put hold at the start of the year after a tenant pulled out, stalling the bid race between Sir Robert McAlpine and Skanska.

Hammerson has now scheduled the project to start at the end of 2012.

David Atkins, Chief Executive of Hammerson, said: “Following the review of our strategy we will focus on being the best owner-manager and developer of retail property within Europe.

“Hammerson has created a retail business delivering outperformance from prime assets in winning locations.

“We now intend to sell our standing office investments over the medium term to maximise returns, redeploying capital into the retail sector to exploit our expertise and build on our existing scale.

“This will create efficiencies that lead to further cost savings and income growth from our portfolio.”

He added that the current economic uncertainty had slowed demand for office space, and rents had remained flat over the year.

Although he said there were a significant number of large occupiers in old buildings with leases coming up for renewal that may support rental levels in new buildings over the medium term.

Hammerson also outlined its revised development pipeline with around £1bn targeted for retail expansion and improvements.