However, in his Mayfair office Ranald Phillips, managing director of Centenary Investments and a keen sailor, is almost looking forward to stormy weather. He believes the company - set up in 2002 as a specialist shopping centre investment manager - is well positioned for the downturn.

He gives good reasons why he should be cheerful when gloom is enveloping other parts of the industry. First, Centenary deliberately stepped back from the market two years ago when the directors came to believe that values were becoming unsustainable.

"Buying off low yields was always going to be risky when you were entering a period of lower tenant demand," he says.

And he explains that the company was always set up to thrive in tougher market conditions. "When we set up Centenary we didn't expect the bull market to continue as long as it has. We haven't bought anything for 18 months but now I think we're entering a period where the opportunities to buy off a realistic yield will come round again."

Phillips believes that in such a market experience will be at a premium. And that's a commodity Centenary isn't short of. Phillips himself spent two decades as a leading agent with his own consultancy, Phillips Wilkes, advising institutions and property companies. His fellow directors are ex-Donaldsons partner John Burmester, another former agent, Jerome Smith, and Linda Black, who joined the business last year from The Mall Corporation where she was retail development manager, with responsibility for schemes in Edgware, Ilford, Southampton and Middlesbrough.

"The one thing we know for certain is that we can always drive rents," says Phillips. "We can apply our expertise to enhancing a rental stream through both tenant engineering and overall development. And at the present time the market is entering a phase where that philosophy is becoming increasingly relevant."

The existing portfolio is valued at £175m, but Phillips believes that it could potentially grow to £500m - just by exploiting the value of the existing centres.

"Our stock selection is always predicated on growth potential in the town itself and in the catchment," Phillips says. "Typically we look at towns that are trading off lower rents than their competitors. And in all six of our centres there's plenty of scope to develop them further in order to meet that potential."

For instance, a 55,000-sq ft extension is just about to complete at the Priory Centre in Worksop. Two big prelets - to Marks Spencer Simply Food and New Look - kick-started the £7.5m project at the beginning of this year.

Subsequently, 3 Stores, Costa, Select and Poundland have come on board. "There's less than a handful to let, which is quite reassuring in today's market," Phillips says.

The centre was bought in 2003 for £11.5m, but on completion of the extension the expectation is that it will be worth £30m.

Next spring the Castle Centre in Antrim will be renamed Castle Mall when its own 25,000-sq ft extension opens. Woolworths has prelet 10,000 sq ft and another major multiple has agreed terms.

"This is just the first phase of a plan to really regenerate Antrim town centre," says Phillips. "Northern Ireland's revitalisation had to begin with Belfast, but now it needs to spread out."

With this in mind, Centenary plans to further enhance and extend the centre over the coming three to five years.

Both of these projects are owned by the Active Retail Fund, a joint venture between Centenary and Edinburgh-based Hunter Property Fund Management. The equity comes from a number of private and institutional investors, including clients of LaSalle Investment Management.

The third property in the Active Fund is The Guineas centre in Newmarket, formerly known as the Rookery Centre. Here, a decision is expected shortly on a planning application to extend the existing centre, but Phillips believes this will be just the first phase of something rather more ambitious.

"Rents have grown from £55 to £80 zone A in the three years we've owned the scheme," he notes. Centenary's strategy is usually to hold an asset for a minimum of five years, although Phillips may sell earlier than that if circumstances change. "To carry out any meaningful change to a centre takes at least three years to plan and implement," he points out.

In Great Yarmouth, a 100,000-sq ft-plus extension to the Market Gates centre has just gone on-site with completion due in autumn 2008. Debenhams will be anchoring with a new format. "Originally they agreed to open a Desire store, but then they said they thought Great Yarmouth could support a full-line store," says Phillips. Equally, the extension will allow New Look to upsize from 2,500 to a more substantial 16,000 sq ft.

Phillips says the decision to buy Market Gates - in a joint venture with Miller Developments - came as a result of prolonged talks with the local authority and the local Urban Development Corporation, which is chaired by ex-BCSC president Richard Wright. "We go back a long way together," Phillips remarks.

"We noticed that the council wanted to attract a new deep-water harbour, which encouraged our interest in investing in the town. Strangely, that wasn't mentioned in the vendor's documentation."

A further partnership exists with Ashcroft Estates. Centenary Ashcroft owns Anglia Square in Norwich and the Aylesham centre in Peckham, south London, both of which have good potential for mixed-use redevelopment.

An application is about to go in for the redevelopment of Anglia Square, with 200,000 sq ft of retail and 400 residential units as phase one alone. And talks are already under way with a residential developer keen to take on that part of the project.

"There's a lot of support from both the city and county councils," says Phillips. "They see it as a catalyst for their wider objectives for the area. And the current scheme is a well-known eyesore."

In Great Yarmouth and Norwich the importance of a good relationship with the local authority is absolutely central to Centenary's approach.

"We take the view that it's their town and not ours. Investment performance is easier to achieve when you work with the community and not against it. However, if we find the local authority isn't willing to back regeneration then we'll walk away, and in the past there have been times when we've done just that," Phillips comments. "It happens less frequently now, but there are plenty of other towns where we can invest more fruitfully."

The same applies to investment joint ventures. "We're getting quite experienced at forming partnerships," Phillips says. "It works provided it's the asset management team that's leading the strategy. You need firm agreement about what everyone wants to get out of it. We need to work with partners who share our objectives."

So as the market gets tougher and the outlook less rosy, Phillips views the future with confidence. "To get superior returns you have to rely on experience. It's called real asset management and that has to involve development," he concludes.

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