Commercial property demand is climbing again as Bank Rate cuts reopen investment deals. Retail parks, offices, and industrial assets lead recovery, says Rightmove.
Commercial property rebound offers new opportunities for landlords
After two years of stagnation, the UK commercial property market is showing clear signs of recovery. Investment demand rose sharply through mid-2025 following the Bank of England’s interest rate cuts to 4%, reawakening buyers, lenders, and investors across retail, office, and industrial sectors.
For smaller landlords — those with one or two retail units, a mixed-use parade, or a single office block — the upturn is real but uneven. The key challenge now is knowing which assets will benefit from renewed demand and which will remain stuck in the slow lane.
Lower interest rates reignite investor demand
The Bank of England’s Monetary Policy Committee (MPC) held the bank rate at 4% in September 2025, following two earlier cuts in May and August. While modest, those reductions have begun to make borrowing viable again, narrowing the valuation gap between sellers and buyers that froze deals through 2023–24.
According to Rightmove’s Q2 2025 tracker, overall investment demand for commercial property is up 20% year-on-year, with retail up 35% and office demand surging by 65%. The momentum continued into the third quarter, where retail investment rose another 30%, office demand climbed 31%, and leasing activity improved by 7% compared with 2024.
Rightmove’s Managing Director of Commercial Real Estate, Andy Miles, said:
“Bank Rate cuts are supporting investment in the retail sector and the commercial property market more broadly. Realism over values and an improving occupational market are both helping confidence return. But the picture is uneven — some high streets and shopping centres in secondary areas will recover more slowly.”
This cautious optimism reflects a pragmatic shift: while investors are back, they are still highly selective about asset quality and tenant resilience.
Retail parks and prime offices lead the recovery
The strongest gains are in retail parks and convenience-led retail, where stable footfall and essential spending have sustained occupier demand. According to Savills and JLL, supermarkets, discount retailers, and bulky-goods showrooms are outperforming high-street units and shopping centres.
High-street investment demand was up 45% year-on-year in Q3 2025 — slightly down from Q2’s 56% rise but still robust. Prime urban locations such as Manchester, Bristol, and parts of central London are seeing renewed investor appetite, while secondary parades are lagging behind unless they offer redevelopment potential or flexible use options.
In the office sector, Grade A buildings with strong sustainability credentials and hybrid working features are in demand. CBRE’s mid-year outlook notes that leasing activity and investor confidence are recovering for high-quality assets, particularly in London’s Westminster, City, and Hackney markets.
Secondary office stock, however, remains difficult to shift. Outdated layouts, weak EPC ratings, and high refurbishment costs are pushing many owners to consider conversion to residential use where planning allows.
Small commercial landlords: how to stay ahead
For small-scale landlords, the emerging recovery requires both realism and strategy. Rightmove advises owners to review financing early, as lenders are showing renewed appetite for refinancing well-performing assets. Those with fixed-rate loans expiring soon should act before rates rise again.
Landlords should also categorise assets — prime, improvable, or disposal candidates — and plan capital expenditure where returns justify it. In today’s market, “occupier-focused” improvements such as energy efficiency, flexible layouts, and basic amenities outperform cosmetic upgrades.
Retail landlords in secondary areas can explore short-term lets or pop-up occupiers to maintain cash flow while repositioning assets. For offices, flexible leases with break options and phased rent reviews can attract tenants wary of long commitments.
“Landlords who adapt their leasing and capex strategies to what tenants actually want will come out on top,” noted one Midlands-based commercial agent. “Those holding out for pre-2022 valuations will wait a long time to sell.”
Editor’s view
The commercial property thaw is welcome, but it’s not a tide that lifts all boats. Investors are rewarding quality, sustainability, and adaptability — not nostalgia for old market values. For landlords, 2025 is the year to reassess portfolios with cold-eyed realism: upgrade what’s viable, refinance smartly, and don’t waste time on assets that no longer fit tomorrow’s occupier needs.
Author: Editorial team — UK landlord & buy-to-let news, policy, and finance.
Published: 22 October 2025
Sources: Bank of England MPC data (2025); Rightmove Commercial Property Tracker Q2–Q3 2025; CBRE Mid-Year Outlook 2025; JLL and Savills retail market reports.
Related reading: Falling interest rates reignite landlord interest in retail and office space investment
