Retail is expected to be the star performer of the property investment sector over the next 12 months, suggests King Sturge.
This year, retail property is expected to post total returns, covering capital and rental growth, of 10 per cent - well ahead of offices, industrial, leisure and residential.
Retail warehousing will continue to be retail property's top performer.
It is the only retail sector likely to show rental growth this year. King Sturge head of out-of-town retail Mike Taylor also pointed to increased investment activity in the food stores sector.
While retail is predicted to remain in fashion and enjoy good returns compared to other property sectors, equities or other investment categories, only quality and larger retail locations are likely to perform well, suggests the firm's head of research, Dr Angus McIntosh. Total returns from retail property are expected to fall to 7 per cent next year. Last year, total returns topped 13 per cent.
McIntosh also points to 'a much slower leasing environment' for retail this year, a view strongly supported by the latest CBI/GVA Grimley Property Trends Survey.
King Sturge head of in-town retail Charles Miller said that convenience food stores are set to drive the retail property market as the format enjoys rapid expansion. Mid-market operators are likely to drive what rental growth there is in the retail property market this year.
The slowdown in the occupation market is highlighted by the changing fortunes of coffee shops and mobile phone operators, said Miller.