The 16-strong portfolio of properties owned by Treasury Holdings offshoot Real Estate Opportunities (REO) has been marked down by more than 40% as the slump in the commercial property market in Ireland grows more severe.

The portfolio has seen its market value decline despite the vast majority of the properties being leased out over long terms with strong cash flows. Treasury Holdings and Real Estate Opportunities are associated with property investors and entrepeneurs Johnny Ronan and Richard Barrett.

The portfolio includes the Stillorgan Shopping Centre in south Dublin and several office properties in the nearby area.

Fitch, the ratings agency, marked down the portfolio significantly below a previous revaluation which took place in January.

At that time the portfolio experienced a 9% market value decline from peak values in 2008, however Fitch, one of the world's big three ratings agencies, said a further 35% decline needed to be factored in. The loans behind the portfolio are securitised in a vehicle called Opera Finance.

Fitch said of this vehicle: "The creditworthiness of the transaction has been impacted by the severity of declines in the Irish commercial real estate market.''

The actions by Fitch indicate the poor view agencies currently take of prospects in the Irish commercial property market. The agency said: "While the portfolio displays a strong income profile, which largely insulates it from the current turbulence in the Irish domestic market, Fitch believes the retail element of the portfolio to be more exposed to potential declines in income due to tenant defaults or lease renegotiations.''

Earlier this year Standard & Poor's said over one-third of the net rental income for the property portfolio was derived from tenants in the financial services industry. REO for its part pointed to the strong nature of the tenants and the negligible level of vacancies.

It also said the leases were over very long terms and there was no arrears problems of any kind.

Treasury was set up in 1989 by Ronan and Barrett. It now claims to control 120 real estate projects which it recently claimed had a value of €4.8bn.

Treasury Holdings is the largest single shareholder in REO, which is a listed company.