After years in the doldrums, shopping centres are set to provide the best returns in UK real estate over the next four years, according to a new forecast.

Shopping centres are expected to provide an average annual return of 8.7% between now and 2029, the Investment Property Forum’s quarterly consensus forecast said. The forecast is based on a quarterly poll of investors’ expectations for rental and capital growth in various UK property sectors.

Shopping centres lead the way now, the IPF said, with returns coming in at 9.5% for 2025. From 2026, the sector will be overtaken by retail warehousing, but on average, the 8.7%-a-year return between now and 2029 will beat the 8.3% provided by retail warehousing.

Rents have been growing consistently in the best shopping centres, driven by a lack of supply over the last decade. The investment market has been slow to catch up, but the year is finishing with a flurry of shopping centre deals.

Slightly behind the two main retail sectors is industrial, where average projected total returns are 8% a year, driven by steady rental growth.

Offices are expected to be one of the lower-returning sectors, with an average of 6.9%. Even though West End offices are expected to see the strongest rental growth of any sector, with an average of 3.4% a year between now and 2029, its total return will be 6.9%, just a hair above the City at 6.8%.