However, investors do not appear to be perturbed by the bad news, and property yields stabilised after two years steady weakening. The average property yield fell marginally over the quarter to 7.3%.

Retail property has staged something of a comeback, with high street shops the best-performing sector over the quarter with 1.1% rental growth. But according to CBHP this dominance is unlikely to continue. 'The leading high street fashion retailers retain a strong bargaining position and are able to negotiate favourable rental levels and incentives from prospective landlords,' said the report. Investors are more positive about retail property, however, and yields on high street shops and retail warehousing both improved by 0.1% to 7.0% over the quarter.

The firm is more bullish about out-of-town retailing, which is still the best-performing sector over a 12 month timeframe, with 5% year-on-year rental growth. Tenant demand still outstrips supply on prime retail warehouse parks.