Landlords are taking advantage of falling borrowing costs and strong market performance in key areas such as heavy industry, spurring a rise in commercial property investments. Shawbrook’s latest internal data reveals a 102% year-on-year increase in the proportion of lending allocated specifically to commercial property purchases from 2023 to 2024.
The increase has been especially notable in the South East, which accounted for 30% of the total commercial purchase lending. The region remains popular with investors due to its strong transport links, steady economic growth, and high demand.
This growth aligns with a trend of property investors diversifying their portfolios. Shawbrook’s data also reveals that semi-commercial applications have also risen, growing from 13% in 2023 to 24% in 2024, indicating a shift towards high-yielding asset classes.
To meet this demand, Shawbrook recently enhanced its commercial investment product offering and raised the maximum LTV for retail, healthcare, education, and industrial assets, supporting investors with diverse portfolios.
Daryl Norkett, director of real estate proposition at Shawbrook, commented: “The commercial property market is recovering after a turbulent period, with several sectors showing renewed signs of growth. Investors are keen to expand and diversify their portfolios with high-yield, high-income properties like commercial, semi-commercial, and HMOs. These assets not only offer potentially higher returns, but diversification can also help to build resilient portfolios even in uncertain markets. However, investors should conduct thorough research, as risk profiles can vary significantly across regions and asset types. Speaking with a specialist commercial broker can provide invaluable guidance on the best options available."
