When it comes time to look back on the 2020s, property professionals will likely view the decade as a tale of two halves. The pandemic provided an inauspicious start: presenting a myriad of challenges for the industry, dramatically changing people’s behaviours and working patterns for a prolonged period.
In addition, global instability, inflationary pressures, and increased UK tax and regulation have all added to a sense of gloom since the turn of the decade.
However, now there are clear signs that the commercial property industry is turning a corner, with key growth areas coming to the fore. The latest data from the CBRE shows consistent growth in capital value for commercial property rising by 0.3% in March 2025 and rental values increasing by 0.4%, while month-on-month total returns were 0.8%.1
And, looking ahead to the next five years, our latest report ‘Cities in focus 2025: Commercial property insights’ identifies office space, retail units and student housing as offering excellent opportunities for investors, property professionals and developers in the commercial property sector.
Office Space
While the post-pandemic trend has moved towards a return to the office, the legacy of remote and hybrid working is still very much prevalent for most industries. In turn, this has sparked a renewed appetite for investment to outcompete the comfort of home working, which has seen businesses look to new build sites that can cater to hybrid working patterns and lower overheads; or refurbish existing sites to meet the demands of today’s modern workforce.
The key considerations for property professionals looking to position themselves to gain from the changed demand for office space is this need for higher quality stock (Prime and Grade A). However, there are also opportunities for the readily available supply of lower grade premises (Grade B and C). Investment in these premises - to improve energy efficiency, infrastructure and amenities, and cater for hybrid and co-working models of work - will be the key to unlocking growth here.
Indeed, our latest research into the commercial real estate market reveals that two fifths of property professionals view office modernisation and technology upgrades as top trends across all sector office refurbishments. Another two fifths add that there is now a demand for wellness-focused and fitness-related upgrades.2
Retail Space
Property professionals should not be panicked by the noise around the demise of the high street following the pandemic, but instead look at how the market is changing, and where the new opportunities lie.
The retail sector is forecast for strong growth over the next five years. It’s expected to deliver an average 32% increase in retail revenue from high streets, retail parks and shopping centres by 2030. The continued growth of online retail presents investment opportunities in the form of a continued increase in quality logistic and distribution hubs in strategic locations around the country.
For those wishing to hedge their bets on the retail sector, there’s plenty to be said for investing in semi-commercial property, which has been considered by (94%) of commercial property professionals. It can be a sensible way to offset risks and generate multiple incomes from one property.
University-lets
In the student accommodation space, the private sector is increasingly taking the mantle for meeting the nationwide shortfall. Demand remains strong for Purpose-Built Student Accommodation (PBSA) - even with the recent dip in student dorm reservations.
When looking at student housing and accommodation - a notable 81% of property professionals, investors and developers believe investing in this over the next five years represents a good opportunity.
In conclusion, the scope for growth in the commercial property sector in the medium-to-long-term cannot be ignored, but unlocking this potential requires careful planning and consideration of the best sectors, and geographical locations, to invest in. Support from specialist lenders who appreciate the need to be fast and flexible and who can advise on the best commercial mortgage products is vital for the success of the industry.
