UK institutional investors reduced their exposure to high street shops by 13 per cent last year because they are nervous about occupier demand, according to research by Donaldsons.
However, the agent said that because yields have remained stable, these disposals could be seen as premature. Donaldsons characterised the letting market as stable, if a little fragile.
Bryan Duncan, head of Donaldsons' retail division, said interest rate rises would undoubtedly have an immediate impact on the high street market, forcing retailers to shelve expansion plans and evaluate their property holdings.
However, he added: 'The shopping centre and retail warehouse markets could be seen as slightly more robust as a result of recent planning legislation that is likely to prevent the introduction of any further supply.'