EUROPE - European pension schemes are diverting their retail exposure away from shopping centres toward city-centre high streets in search of higher yields generated by active management. David Rendall, chief executive at Cushman & Wakefield Investors European, told IPE Real Estate that "urban retail" - high street assets redesignated to avoid the label of a "4%, low-yield prime shop" - would benefit from city-centre regeneration. "Town centres are coming back," he said. "What you're seeing is this re-energising of inner-city areas." Rendall cited retailers investing in European city centres and the growth of urban tourism as structural push-factors. "There's a political will from the city authorities," he said. "This is a theme across Europe - the regeneration of city living, making places more human." Yet the primary drivers are the characteristics of high street assets themselves, a low rate of obsolescence because retailers tend to do their own fitting out. "It's difficult for investors to get access," he said. "They tend to be smaller investments, and it's quite tricky. You can only get one or two. It's a very local market." Supply constraints have been one reason why pension funds have so far failed to invest significantly in the European high street, he said. However, Rendall said the appetite among UK local authority pension funds for PURetail - a Luxembourg-registered PURetail FCP launched with SWIP last year - had been "smaller than you might expect because they tend to be quite domestic in their outlook". Although he said he would not advise investors to disinvest from out-of-town shopping centres, he said: "Our money is on the high street." In future, he said, investors will have to "roll their sleeves up to make returns" in retail because they will no longer be able to rely on in rental growth and yield compression. Rendall added: "You need to know your market, and more than that, you need to know your submarket. "Retail has its peculiarities. You need to know the occupier market, what's driving demand. "Skillful managers work with the tenant. If you lose your tenant, it's an expensive business."