Speaking at the MIPIM property conference in Cannes, Julian Stocks, head of capital markets in England for Jones Lang LaSalle, argued that the investment market is not all doom and gloom, and he forecast that shopping centres would outperform relative to the office and industrial sectors.

Shopping centres, which draw their income from a diverse range of tenants, have defensive qualities which office buildings, often dependent on a single tenant, lack. And at a time when yields are continuing to soften, income is becoming more important to investors.

CBRE's global economic guru Ray Torto echoed this view. "The easy money has been made," he said. "Going forward we're going to have to focus on making money the old-fashioned way, through income."

And Alice Breheny, head of property research at Henderson Global Investors, said: "Asset management is coming into its own again. In a lower-return environment, asset management and tenant engineering to extract rental growth is the only way forward."

Breheny said shopping centres remained on Henderson's buy list for 2008. "We're definitiely in the market for more," she said. "We want standing investments that have a development upside, like our schemes in Hull and Glasgow."

Alex Watt, managing director of property investment at Standard Life, has also nailed his colours to the shopping centre mast. "We believe the strong performance of the office market is coming to an end, the trend accelerated by falling demand from financial companies," he said.

"We therefore expect retail, particularly prime quality, to offer the strongest opportunities for rental growth over the next few years."

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