The RICS believes that retail will be the best-performing sector over the next two years on the back of resilient consumer spending. This marks a dramatic turnaround because in recent years retail has been the worst-performing property sector in the UK.

The economists at the RICS are basing their forecasts on a relatively benign outlook for the UK economy. They believe the current downturn is likely to continue until the middle of next year before this year's spate of interest rate cuts begin to take effect and boost activity. And they also believe the property industry is in better shape to survive a downturn than it was in the early 1990s.

RICS economist Fergus Hicks said: 'The late 80s was characterised by an overprovision of space which lay empty for years after recession set in, Canary Wharf being a prime example. This time demand, though weakening, will not see such a sharp drop, while supply will not increase as rapidly as a decade ago. Over 2002/3 the commercial property market is set to perform well compared with the early 1990s.'