This prediction comes as IRP Property Investments, F&C's second most successful property investment trust, released its annual financial reports.
Both IRP and F&C's best property performer, FCPT, have portfolio's heavily representing the UK's retail sector have seen share prices rise by over 20 per cent in the last year.
This trend continues through the UK market with Standard Life Investments Property Income Trust, which grew by 23.6 per cent in the last year, also favouring the retail warehouse and high street retail sectors.
Henderson Global Properties, operating mainly out of the US, has also seen its 34.3 per cent investment in the retail sector help boost its share price by 14.9 per cent.
IRP investment manager Ian McBryde, said a slight fall in capital values during the second-half of 2010 is expected to continue through 2011, forcing the fund to focus on maintaining high occupancy levels.
McBryde said there are property hot and cold spots across the country but there was still a bias towards the South East.
The rise of quangos and other regional agencies in the last ten years was a boost to all sectors of the property market and was especially beneficial to the North, but with a lot of them closing or reorganising, this market has started to disappear, said McBryde.
"We are always looking for opportunities to move investment into other areas," he said.
For the year ending 30 June 2010, IRP saw a 23.2 per cent ungeared total return for the portfolio with a 60.5 per cent total return on the share price and a 27.8 per cent net asset value (NAV) total return per share.
The NAV increase was helped by the re-letting of the Clifton Moor Gate property in York for a further 10 years, which increased the property value by £2.6m, the results show.
Re-lettings have been the source of this portfolio's success with Investment Property Databank's (IPD) void rate falling to 2.1 per cent, down from 5.7 per cent on 30 June 2010, significantly ahead of the IPD's 10.1 per cent average.
Financial Express data shows that there is a considerable spread in investment trust property sector returns over the past three years.
Property sector returns over 3-yrs
Source: Financial Express Analytics
However, as measured against equities and government bonds on a risk/reward basis over the past decade, property may well have provided the diversification elements required for those looking to balance elements of risk in their portfolios. This suggests that while returns from property remain uncertain in the short term, for the long term investor there may be good reasons for reviewing exposure to this type of asset.
Property vs equities, government over 10-yrs
Source: Financial Express Analytics