Commercial real estate market recovery gains pace
The retail property sector saw a further increase in investment demand during the third quarter, new figures from property listing platform Rightmove have shown.
Enquiries to commercial agents regarding retail property rose by 30% year-on-year, while the availability of retail listings declined by 2%. This follows a 35% annual rise in retail investment demand recorded in the previous quarter.
High-street retail, which represents a significant share of the sector, experienced a 45% increase in investment interest compared to the same period last year. Although this is a slight decrease from the 56% annual growth seen in the second quarter, demand remains strong.
The uptick in retail investment activity has coincided with a series of reductions to the Bank of England’s Base Rate, which was lowered to 4% in August—the fifth cut since August 2024.
Beyond retail, the office market is also showing signs of improvement. Investment demand for office space increased by 31% year-on-year, and leasing demand rose by 7%. Notably, areas such as Westminster, the City of London, and Hackney have experienced significant rises in office leasing activity.
The industrial sector continues to outperform other segments. Demand for leasing industrial premises climbed by 29% compared to the previous year, and investment demand in the sector surged by 53%.
Overall, the commercial property market is benefitting from the recent monetary policy changes. Rightmove’s data indicates that total investment demand for commercial property was up 11% in the third quarter compared to the same period in 2024, although this is lower than the 20% annual increase seen in the second quarter.
“Bank rate cuts are supporting investment in the retail sector, and the commercial property sector more broadly compared with last year,” said Andy Miles (pictured right), managing director of commercial real estate at Rightmove. “The retail sector is also being helped by more realism over values, and an improving occupational market.
“However, like all aspects of the commercial property market, there are some segments and sectors of the market doing better than others. High-street retail is showing some positive figures overall, but some high streets and shopping centres in secondary locations will be moving more slowly.”
For Michael Sears, advisory panel member for NAEA Commercial at industry body Propertymark, the sustained momentum in retail property investment, particularly in the high-street sector, looks encouraging.
“The annual uplift in retail investment demand highlights growing confidence, especially as investors seek value in a market where pricing has become more realistic,” he said. “The broader recovery in commercial property investment, from offices to industrial, is also welcome, particularly the resilience of the industrial sector and signs of returning strength in key office markets.
These trends support the view that confidence is gradually returning across commercial real estate, driven by improved financing conditions and occupier demand.
As ever, commercial agents and property professionals play a vital role in helping investors and landlords navigate evolving market conditions and ensure that confidence is matched by long-term sustainability.”
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