And over here LIBOR - the rate at which banks lend money to each other - now stands at 1 per cent above the Bank of England base rate. So if banks will only charge each other extortionate rates, what will they charge a property investor looking to buy a secondary shopping centre?

Edward Ziff, chairman and chief executive of Town Centre Securities, was unequivocal in his statement to shareholders last week: "Recent interest rate increases have taken the heat out of the investment market and there has been a marked slowdown in transaction activity over the last two months." And he warned: "As we move into the autumn we will see property values have fallen."

But weighed against all this, the OECD has just concluded that the UK economy is performing better than forecast. In fact it's the strongest of the G7 economies and is expected to grow at 3.1 per cent this year. Shopping centre values are a function of the rent that retailers are willing to pay, which in turn is a function of what they can take through the tills. If the overall economy is growing strongly there's no reason why tenant demand - and investment values - should collapse.

It seems to me that the financial markets are becoming obsessed with arcane factors while losing sight of the bigger picture. Let's hope the financial squall blows over soon and owners can once again make investment decisions based on property fundamentals.

l This month Shopping Centre's sister publication Shopping Centre Ireland launches a major new event, to be held in Dublin next spring. The All Ireland Retail Property Forum will prove a unique opportunity to gain an insight into this most dynamic of markets, so watch out for more details in the coming months.

Graham Parker, Editor

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