The strong rally in retail property investment markets continues apace, albeit with growing signs of a market that is ‘pausing for breath’. According to IPD, capital values for all retail increased by 1.65 per cent in March. Capital values for shopping centres lagged behind this growth at 1.41 per cent as they were outperformed by retail warehousing (+1.95 per cent) and standard shops in the South East (+1.50 per cent).

Disappointingly, the recent trend of a deceleration in rental decline reversed over the last month. The rate of decline in March (-0.24 per cent) was higher than the preceding month, emphasising again the slow recovery in occupier markets. And Stephen Springham, head of retail research at King Sturge believes retail rents are unlikely to move back into positive territory until next year.

In isolation from the other property segments, shopping centres saw rents slip back by -0.34 per cent in March, a more severe decline than in retail warehousing (-0.11 per cent), but a marginally better performance than standard shops (-0.37 per cent).