Investors are flocking back to the UK commercial property market, with demand to buy assets rising at its fastest pace since mid-2021, according to new data.
Figures from Rightmove show that enquiries to purchase commercial property increased by 28% year on year, reflecting a sharp rebound in investor confidence after several challenging years for the sector. The resurgence has been fuelled by easing mortgage rates, which are improving borrowing conditions and strengthening the case for long-term property investment.
The strongest momentum is being seen in the industrial sector. Rightmove’s latest Quarterly Commercial Insights Tracker reveals that demand for industrial property as an investment surged by 72% compared with the final quarter of 2023, while leasing enquiries rose by 31%. The growth is being driven by the continued expansion of online retail and supply-chain reconfiguration, which are sustaining demand for warehouses, logistics hubs and large-scale distribution centres.
Office property has also benefited from renewed interest. Investment demand in the office sector rose by 57% year on year, while leasing enquiries increased by 11%. Rightmove says this points to a gradual shift back towards more frequent office-based working in early 2025, particularly for businesses seeking high-quality, well-located space. Supply has increased by just 2%, suggesting competition remains strong for modern, efficient office buildings.
Andy Miles, managing director of commercial real estate at Rightmove, said falling interest rates have “further fuelled the attractiveness to invest in commercial property after a couple of tough years for the sector”, adding that the uplift in demand is being seen across multiple asset classes.
The more positive outlook is echoed by Savills, which reports that enquiry levels and completed deals have exceeded expectations towards the end of the year, particularly in warehousing and distribution. The firm also notes a growing focus among occupiers on modern, energy-efficient buildings, suggesting that high-specification industrial and office assets are likely to remain in strongest demand through 2025.
With interest rates stabilising and occupier demand showing signs of resilience, market participants expect the recovery in commercial property investment to gather further momentum in the months ahead.
