Together report highlights renewed interest in office, retail, and student housing
After several years of economic headwinds, the UK’s commercial property sector may be poised for a rebound, according to a new report from specialist lender Together.
The firm’s latest study suggests growing investor confidence across office, retail, and student accommodation sectors — bolstered by recent figures from CBRE showing a 0.3% rise in commercial property capital values and a 0.4% rental value increase in March 2025. Total returns for the month reached 0.8%.
Office demand driven by hybrid trends
Renewed interest in office space is emerging as more companies commit to hybrid work models. This shift is driving demand for both new developments designed for flexible working and modernised existing buildings.
According to the report, 41% of surveyed investors, developers, and property professionals highlighted technology and modernisation as key refurbishment trends, while 38% noted a focus on wellness and fitness upgrades.
A substantial majority (82%) believe office properties will offer strong investment opportunities over the next five years. Of these, 16% expect income from offices to rise by as much as 30% by 2030. The findings suggest that companies failing to update their workspaces risk falling behind in talent attraction and retention.
Private sector steps in for student housing
The student accommodation market is also attracting investor attention, particularly as universities face tightened budgets and rely more on external providers. Despite a short-term decline in student housing reservations, purpose-built student accommodation (PBSA) remains in demand.
Some 81% of property professionals see student housing as a promising investment area through 2030. Within this group, 18% anticipate revenue growth of up to 20%, and 10% forecast gains between 31% and 40%.
Retail stabilises as physical stores gain ground
After two years of contraction, the UK retail sector posted a modest recovery in 2024, with total sales rising by 1.4% to £517 billion and transaction volume up by 0.7%, according to the report.
While e-commerce continues to grow — spurring investment in logistics infrastructure — the high street is also showing signs of life. The study found 79% of commercial property professionals now view physical retail as a strong investment, particularly in retail parks and shopping centres. In terms of industrial assets, 83% rated warehouses and logistics hubs as offering the best value by 2030, with 15% expecting revenue increases between 21% and 30%.
“Whether it’s student housing or investing in the future of retail and office space, by 2030, the landscape for the commercial market will have changed and improved exponentially for investors,” said Ryan Etchells (pictured), chief commercial officer at Together. “While it’s good to see light at the end of the tunnel after a difficult few years: now is the time to support and nurture this growth so it is sustained.
“With all the new regulations and government plans for property over the last 12 months, there has been a rise in requests for rolling instead of fixed contracts on sites, staggering payments rather than investing upfront and shorter timelines. This is why it will be critical for these property professionals to continue working with the right type of lender who can ensure they’re financially poised and adaptable to seize new opportunities.”
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