So at last we have a real barometer of the state of the letting market. Landlords and tenants have been playing poker for high stakes, and it's only when a centre opens that we can judge who came out on top.

And the picture is not as bleak as many had forecast. It seems that retailers have been leaving it late to agree deals, which means a good few shopfitters will be burning the midnight oil. But agree deals they have: the biggest scheme, in Plymouth, opened 90 per cent leased and even Walton, where lettings had been distinctly slow, has enjoyed a late flurry of deals.

This bodes well for 2007, when the development boom really kicks in and some very substantial schemes are scheduled for completion, including Victoria Square in Belfast, Princesshay in Exeter, Silverburn in Glasgow and Grand Arcade in Wigan.

What is harder to ascertain is the level of inducements that were needed to get them to sign on the dotted line. Headline rents seem to be holding up so it's safe to assume landlords have been swallowing their pride and shelling out for capital contributions and rent- free periods.

That's only natural. After all we're in a tenants' market and for most developers yield compression during the development period means that schemes will still beat their original target rates of return.

What happens if capital values start heading the other way will be a different matter, though. As long as landlords can massage the figures to show that rental values are holding up, investors will keep faith with retail property. But if word gets round that rental values are on the slide, then confidence in the whole sector could evaporate. So keep those incentives coming!

Graham Parker, Editor

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