The commercial property sector is witnessing a significant resurgence, with Shawbrook’s latest data revealing a 102% year-on-year increase in lending for commercial property purchases between 2023 and 2024.
Investors are capitalising on declining borrowing costs and strong performance in high-demand sectors, including heavy industry and semi-commercial assets.
Regional Growth:
The South East accounted for 30% of total commercial lending, with its transport infrastructure, robust economy, and high demand making it a hotspot for investors.
Portfolio Diversification: Applications for semi-commercial properties rose sharply, from 13% in 2023 to 24% in 2024, as investors seek to balance risk with higher yields.
Market Resilience: High-yield asset classes like HMOs, semi-commercial properties, and industrial sites are attracting investors aiming to build diversified, resilient portfolios amidst economic uncertainty.
Daryl Norkett, director of real estate proposition at Shawbrook, comments: “The commercial property market is recovering after a turbulent period, with several sectors showing renewed signs of growth. Investors are increasingly targeting high-income, high-yield opportunities while diversifying portfolios to mitigate risk in uncertain times.”
As borrowing costs ease and demand grows in key regions, commercial property is becoming an attractive proposition for investors looking to maximise returns and future-proof their portfolios. However, Shawbrook cautions investors to research regional and asset-specific risks thoroughly, leveraging specialist brokers for tailored advice.
With semi-commercial properties and HMOs also gaining traction, 2024 marks a year of strategic recalibration in the UK property investment landscape.