Of the 44.4 million sq ft of total grocery floorspace in the development pipeline, just over 3.8 million sq ft is currently under construction. In the West Midlands, 320,000 sq ft of grocery floorspace is being built, representing 8.3 per cent of the 4.75 million sq ft of space in the pipeline.

Mr Klein said: “Construction activity levels over time, relative to pipeline totals, provide the best medium-term guide to the amount of space making its way through the pipeline.

“The average between 2002-2007 was 8.3 per cent. Since September 2007 the average has fallen to 7.3 per cent. Regardless of economic conditions, this highlights the continuing fierce opposition some local authorities have to grocery development.”

The CBRE report found that where development is taking place, the emphasis is on leasehold rather than freehold, which traditionally dominated the grocery market.

It said the shift is occurring because ‘town centre first’ planning policies are continuing to drive some large unit supermarket development into urban areas, requiring grocers to forge partnerships with developers.

“Whatever the negative productivity impact of locating large grocery stores on town rather than out-of-town sites, leaseholds do provide an opportunity for physical expansion without as much up front cost,” said Mr Klein.

“Supermarket lease-backs are now well trodden ground and are perceived to be one of the most secure property investment vehicles available, which means raising development capital is not a problem. The only real issue for investors is the potential dilution of existing portfolio value through competing supermarket development.

“Thankfully, as the existing distribution of grocery store stock is known and the pipeline is closely tracked, dilution problems can predicted well in advance.”