Quarterly data collected for Rightmove’s Commercial Insights Tracker has revealed a 35% increase in the demand to invest in retail commercial property compared to the same three-month period a year ago – with demand to invest in the office sector up by 65%. Overall demand to invest in commercial property is up by 20% for the same period.
The data – measured by enquiries to commercial agents about listings on Rightmove – also reveals a jump in demand for high-street retail investment, which is up by 56% compared to the same quarter last year. The increase takes the figure to the highest it’s been since 2021.
This time last year, demand to invest in the retail sector was down by 15% compared with the previous year. Rightmove attributes the bounceback to interest rate cuts and investment in the commercial property sector as a whole, boosted by the Bank of England’s second rate cut of the year in May.
‘The growth of the industrial sector has been one of the main stories so far this year, but we can see a resurgence to invest in retail and office space too’, said Andy Miles, Rightmove’s MD of commercial real estate.
“Rate cuts are helping investment into commercial property, and after a period of decline it appears that retail and office spaces are becoming more attractive to invest in.”
Decreasing supply levels in the retail sector may also be helping to boost demand for available listings, Righmove suggests. The number of retail properties available for investment is down by 4% compared to last year and has been on a downward trend since the start of 2024.
The office sector has seen a similar resurgence, with demand to invest in office space 65% higher than the same three-month period a year ago. Comparatively, at this time last year, this year-on-year trend was down by 13%. Demand to invest in the industrial sector has more than doubled (+105%) compared with the same period a year ago.
Michael Sears, NAEA Propertymark commercial advisory panel board member, said of the figures:
“It is positive to see a rejuvenated appetite regarding investment within the retail and office space sectors, especially considering habits have shifted significantly in recent years. Online commerce fundamentally changed how people shop in many cases, and the pandemic accelerated the home working revolution.
“However, these figures are the highest they have been since 2021 and show that there is still a healthy desire for high-quality retail space across the UK and that many employers are also finding a new balance for their office space requirements that complements hybrid working arrangements with their colleagues. These factors added together are a positive sign of a high street resurgence in many regions.”
Investment demand increased in all regions, with Scotland seeing the largest rise at 29%, followed by West Midlands at 27% , East of England up 24% and East Midlands at 23%. The lowest rise was found in the North East, at 13%.
