The UK commercial property market has faced significant challenges in recent years, from the impacts of the pandemic to rising interest rates. However, as we step into 2025, new trends are emerging that could redefine the landscape for landlords, investors, and businesses.
Our commercial property expert Leigh Doherty shares a breakdown of key trends to watch this year:
1. Flexible workspaces
Flexible office spaces are still popular as businesses adapt to hybrid working models. Co-working spaces and serviced offices are particularly popular among SMEs and startups. For landlords, this means an opportunity to repurpose underutilized office buildings into more dynamic, flexible environments.
2. Green buildings and sustainability initiatives
With the UK government’s 2050 net-zero target looming, sustainability is at the forefront of the commercial property market. Landlords are increasingly retrofitting older properties to improve energy efficiency and meet Minimum Energy Efficiency Standards (MEES). This year, expect to see a surge in investment in green technologies like solar panels, as well as demand for EPC ratings of ‘B’ or higher.
3. Recovery in the market
After a challenging period due to high interest rates and low transaction volumes, 2025 is showing signs of recovery. Investors are cautiously optimistic, with increasing activity in prime office spaces, industrial properties, and high-quality retail assets.
5. The evolution of retail spaces
While traditional retail faces ongoing pressure, experiential retail is gaining traction. Consumers are drawn to destinations that combine shopping, dining, and entertainment. Retail landlords are adapting by integrating leisure elements into their properties, creating a more immersive experience.
6. Tech integration in property management
The adoption of PropTech is transforming how landlords and property managers operate. From tenant experience apps to AI-driven maintenance solutions, technology is making property management more efficient and enhancing tenant satisfaction. 2025 will likely see further advancements, particularly in smart building technology and data analytics.
Opportunities for landlords
For landlords, adapting to these trends is key to staying competitive:
• Invest in sustainability: Upgrading to energy-efficient systems not only attracts tenants but also future-proofs your assets against regulatory changes.
• Embrace flexibility: Offering shorter leases or versatile workspaces can cater to evolving tenant needs.
• Explore tech solutions: Investing in PropTech can enhance operational efficiency and tenant satisfaction.
The UK commercial property market in 2025 is shaped by resilience and adaptability. While challenges persist, landlords and investors who can align with these trends stand to gain in an evolving landscape. By focusing on sustainability, flexibility, and innovation, the year ahead offers opportunities for those willing to embrace change.