Any lingering doubts about the direction of UK retail property should be dispelled by the latest monthly data from Investment Property Databank. For the six months through August, retail properties produced total returns less than half those of either office or industrial real estate, and the latest month's stand-alone figures offer little comfort.

Why retail properties should be performing so much more sluggishly than other asset types is hardly a great mystery; the woes of the retailing sector have been splashed across national dailies for the past two years and several of the largest have announced plans for shop closures.

Thus, new research from Donaldsons, the property consultancy, that says London retailers whose rent is coming up for review this year face rent hikes of 40 per cent is bound to raise a few eyebrows.

The data, contained in a report to be released this week, suggest the tourist boom that has continued unabated in London despite the strength of sterling, is to blame.

"The massive leisure and tourism capital investment programme under way in London is acting as a powerful magnet to both overseas and domestic tourists," says John Burmester, partner at Donaldsons, which specialises in the retail sector.

"That, coupled to the capital's booming job market and growing urban population, makes for a powerful engine for driving up retailers' costs."

The data are food for thought. Despite an upbeat trading statement from Next, the fashion retailer, even high street stalwarts such as Gap are conceding tough trading conditions.

Earlier this year, Arcadia announced it will close stores it cannot trade from profitably, while C&A, the retailer based in The Netherlands, will withdraw from the UK entirely.

Meanwhile, anecdotal evidence suggests that the generalised price deflation that has hit retailers over the past two years is even affecting the "value" end of the spectrum.

In its latest research, Donaldsons itself notes that the signs that retail price deflation has stabilised are somewhat misleading. It says that, in general, it reflects easing of competitive pressures among food retailers: "The price war among non-food retailers shows no signs of abating and detailed data show that the prices of clothing, electrical goods, sports goods and toys are all falling by 3 per cent per year or more."

Therefore, says Donald Cameron-Cuss, another Donaldsons partner, forecasts of 40 per cent rent hikes in central London are a phenomenon that bear scrutiny.

First, he says, central London shops that last had their rents reviewed in 1995 had benefited from the severe drop in rents during the first half of the decade. By 1995, rents had not recovered anywhere close to their pre-recession highs, and were therefore relatively low.

But the data mask the fact that of all central London shops, nearly a quarter are either still over-rented or are rented at market value.

If one casts the net wider to include the south-east, the picture is even more gloomy for landlords. In the outer south-east area, 30 per cent of shops remain over-rented, while in the inner south-east, 32 per cent are paying rents above market.

Only 9.4 and 8.7 per cent of outer and inner south-east area shops respectively, therefore, are paying below market rents. Beyond London, only a very small percentage of shop landlords are likely to see any rent increases at all.

But with retailers of most stripes facing price deflation, are landlords really in a position to demand the rent hikes that the London data suggest are warranted from shopkeepers?

Mr Cameron-Cuss says the broader economic picture suggests not. "We cannot sustain these levels of rental growth. Retailers have to struggle very hard for volume just to stand still," he says, noting that it is only the increases in sales volumes that are offsetting price cuts.

Over the long term, Mr Cameron-Cuss says, it is consumers who will pay the cost of rent hikes, either through more expensive goods in shops or through the consolidation of retailers that reduces choice.

But is the latter outcome really a bad one for consumers?

The answer is not clear. After all, would consumers rather have a large number of mediocre retailers to choose from, or a smaller number of exciting offerings?

Moreover, having fewer retailers seeking shop space is probably the fastest way to curb rent inflation in the high street. That way, the remaining retailers could be more competitive on price.

Perhaps this is one instance where, in the high street, at least, less is more.