If there is any sector in which emerging technology has blunted investors' appetites, it is probably retail property. There, the spectre of a generation of online shoppers shunning the mall for the screen has sent investors running for cover.

However, broadband technology is as much an opportunity as it is a threat, and a handful of forward-looking mall operators is seizing it.

Last week, a group of the largest US mall operators, all of them Real Estate Investment Trusts (REIT), announced the formation of MerchantWired, a venture intended to provide a technology infrastructure for retail centres. The move suggests that some property investors have understood that the sector is among the best placed to benefit from the so-called new economy.

The formation of MerchantWired prompted Deutsche Bank Alex Brown to upgrade its ratings for all the companies in the consortium. They include The Macerich Company, The Rouse Company, Simon Property Group, Taubman Centers, Urban Shopping Centers and Westfield America.

"We believe these mall companies will be the future leaders," said DB.Alex Brown analyst Amy Young in a research note. "In our opinion, this partnering arrangement is another catalyst for the REIT industry and another validation that the convergence of technology and real estate is occurring."

The basic premise for MerchantWired is that the emerging technology offers retailers the opportunity to run their businesses far more efficiently.

MerchantWired has formed partnerships with Cisco Systems, International Business Machines and Intermedia Communications to deploy the architecture.

"The basic idea in all of these things is that as the technology develops, the tenants are asking: `Is there a way to access that technology to increase value?' " says Lee Schalop, REIT analyst at Credit Suisse First Boston.

Easy access to shoppers, suppliers and credit card companies will give retailers an edge over their competitors, allowing them to cut costs while still raising margins.

"The point is that the landlord can provide that access far more efficiently than the individual retailer," Mr Schalop notes.

The competitor to the MerchantWired consortium, Mr Schalop says, is not other mall operators but the telecoms providers. By inserting themselves between the retailer and the telecoms provider, the landlord obtains the advantages of bulk purchase and control of the overall network. The technology companies which have joined the consortium are there to exploit the scale which the mall owners offer.

"Cisco makes Internet routers and it's in there so it can sell more routers," Mr Schalop says.

MerchantWired plans to provide retailers with a so-called virtual private network allowing high-speed connectivity between different stores. This will allow a retailer with sites not only at, say, the 45 Macerich shopping centres nationwide, but also at those of the other mall company partners, to communicate quickly between stores.

MerchantWired also promises to deliver high-speed data connectivity, secure access to the Internet, and video/ Internet broadcasting capabilities, the last of which offers great potential for brand-led promotions at many sites simultaneously.

For instance, Mr Schalop says, Simon Property could host a fashion show at its flagship Mall of America in Michigan, and simultaneously broadcast the event not only to its own malls but to those of its MerchantWired partners.

Meanwhile, European property investors have been much slower to embrace technological advances.

However, there are signs that demand from tenants, along with hot pursuit by telecoms providers, are forcing landlords to consider whether to embrace technology, and if so, how.

Ian Henderson, chief executive of Land Securities, this week announced the company had formed an internal working party to canvass tenants on their technology requirements.

Meanwhile, some mall operators are much further along. Byrne Murphy, deputy chief executive at BAA/McArthur Glen, the factory outlet mall developer, said that the company is working on a broadband strategy for tenants which it hopes to roll out in the autumn. By year-end, BAA/McArthur Glen will have 11 centres in the UK, Italy, Austria and France, sufficient to make online retailing a suitable enhancement.

Mr Murphy declined to be drawn on the nature of the product, except to say that it is directed at the brand-name manufacturers it considers its core customers.

But he notes that the strategy unveiled by some of the US's largest mall operators may not be appropriate for a discount retailer. He says customer acquisition costs - the expense involved in luring first-time customers to a site - are higher in Europe than in the US.

Moreover, factory outlet centres simply cannot offer the range of stock that full price outlets do. Thus, an online retail strategy that requires a full-scale inventory to meet customer orders is likely to be beyond the reach of an outlet centre operator.

"The thing that will kill the economics of any home shopping business is split shipments," Mr Murphy notes.

Shopping online at a factory outlet mall, therefore, will have to be as close to bricks and mortar outlet shopping as possible. But it remains clear that there is scope to use technology within retail property and that landlords are better placed than almost anyone else to provide it. Landlords can do it faster, more cheaply and more effectively.