Retail rents in western Europe will fall says King Sturge.

But King Sturge’s latest research also predicts that most emerging economies will still see rental increases.

Its European Retail Property Market 2009 predicts that the UK, Germany, France, Spain and Italy will see rents fall. They will decline marginally in London but more severely in cities including Milan and Madrid.

But it says emerging economies such as Bulgaria, the Czech Republic, Poland, Romania, Slovenia and Slovakia will see positive economic growth.

A growth in consumer spending plus the need for modernisation will help support the retail property market in these countries.

Retail rents will rise by up to 10% in key locations in cities such as Bucharest, Prague and Warsaw.

The report says that although some retailers will fail in 2009, occupier markets tend to be more resilient in a downturn.

Occupiers are becoming increasingly demanding in their space requirements and will drive a harder bargain with landlords and shopping centre owners.

The report, unveiled at MAPIC today, said the re-pricing of retail assets - capital values will fall by over 30% from their peak in early 2007 to the trough in 2010 – will produce good investment opportunities.

It said that cross-border retail sales now make up around 12% of all European retail sales.

A difficult retail market is more likely to fuel than stymie further cross-border expansion among retailers, with the largest building their market share.