The UK’s commercial property market is showing strong signs of recovery, with regional cities outside London driving a renewed wave of investor interest, according to new analysis from specialist lender Together.
In its latest report, Cities in Focus 2025: Commercial Property Insights, Together highlights Birmingham, Manchester and Glasgow as key growth hubs for commercial property, forecasting attractive yields and increasing demand for retail units, office space and student accommodation over the next 12 months.
The lender has reported a 22% year-on-year increase in commercial lending, with loan volumes rising to £2.8 billion – a signal, it says, that confidence is returning to the sector after a period of volatility.
Ryan Etchells, Chief Commercial Officer at Together, says: “While London continues to command strong attention from investors, our research shows a clear resurgence of interest in regional cities, particularly those with strong cultural heritage, growing student populations and thriving innovation ecosystems.”
TURNED A CORNER
And he adds: “There is a growing sense that the commercial property market has turned a corner.”
Birmingham: UK’s Standout City for 2025?
With its rich manufacturing history and newly minted status as a UNESCO World Craft City, Birmingham is being tipped as the UK’s top city for commercial property investment in 2025.
Together’s research found that 70% of commercial property professionals identified office and retail spaces in Birmingham as good investment opportunities over the next five years, while 78% pointed to Purpose-Built Student Accommodation (PBSA) as the strongest prospect for yields.
Backed by strong lending data, the lender’s commercial and buy-to-let (BTL) loans in Birmingham grew from £80 million in 2023 to £110 million in 2024 – a 38% year-on-year rise.
Manchester: Retail and BTL Yields Set to Climb
Manchester remains a magnet for investors, supported by its thriving tech sector and more than 37.5 million visitors last year. The city’s blend of retail, leisure and semi-commercial stock is attracting a broad spectrum of developers and landlords.
According to Together’s report, 77% of property professionals view retail spaces in the city – from high street bars and restaurants to larger retail parks – as a sound five-year investment. A further 40% identified mixed-use premises, such as flats above shops, as particularly attractive.
Buy-to-let landlords in the city are bullish about the year ahead: one-third expect rental yields to rise by up to 10%, while almost a fifth anticipate gains of between 10% and 25%. A further 8% expect yields to grow by as much as 50%.
Together’s BTL lending in Manchester surged by 92% over the past year, from £27.3 million to £52.5 million.
Glasgow: Professional Services and High Street Demand Fuel Growth
Scotland’s largest city is in the midst of a once-in-a-generation transformation, with major investments in infrastructure and office development across Glasgow city centre.
As home to several of the UK’s leading professional services firms and a growing innovation economy, demand for commercial space is outpacing supply in some sectors.
According to the report, 80% of property professionals see Glasgow’s retail offering as a compelling opportunity, while 98% are now actively considering semi-commercial properties across the city.
Together’s commercial loan book in Scotland reflects this trend, with lending up 31% from 2024 to 2025.
CAUTIOUS OPTIMISM
The report attributes this positive trajectory to several factors, including a return to hybrid working, rising business confidence – now at its highest level in nine months – and renewed optimism in the wider economy.
Etchells adds: “The regional cities we’ve identified are benefiting from long-term structural trends and fresh investment.
“But for investors to fully capitalise on these opportunities, flexible financial support is vital.
“Specialist lenders like Together are well-placed to provide the funding solutions needed to unlock growth and diversification across the UK’s evolving commercial landscape.”
