Investor appetite for UK retail property is gathering pace as successive Bank of England rate cuts begin to lift confidence across the commercial real estate sector, new data from Rightmove shows.
Enquiries to commercial agents about retail property rose by 30% in the third quarter of 2025 compared with the same period a year earlier, while the supply of retail space fell by 2%.
High-street retail led the recovery, with investment demand up 45% year on year, only slightly down from the 56% recorded in the previous quarter.
The renewed momentum follows five interest rate reductions since August 2024, with the Bank of England’s base rate now standing at 4%. Analysts say the lower cost of borrowing is beginning to feed through into investor sentiment after two years of subdued activity.
REALISM OVER VALUES
Andy Miles, Managing Director of Commercial Real Estate at Rightmove, says: “Bank Rate cuts are supporting investment in the retail sector, and the commercial property sector more broadly compared with last year.
“The retail sector is also being helped by more realism over values, and an improving occupational market.
“However, like all aspects of the commercial property market, there are some segments and sectors of the market doing better than others. High-street retail is showing some positive figures overall, but some high streets and shopping centres in secondary locations will be moving more slowly.”
INVESTMENT DEMAND UP
Outside the retail market, investment demand in offices was up 31% year on year in Q3, with leasing demand rising by 7%. Activity was particularly strong in Westminster, the City of London and Hackney.
The industrial sector continues to outperform, with leasing demand up 29% and investment demand up 53% compared with the same period last year.
According to Knight Frank, total industrial take-up reached 11 million sq ft in the quarter, keeping 2025 on track to exceed last year’s 36 million sq ft total.
WELCOME BOOST
Claire Williams, Head of UK and European Industrial Research at Knight Frank, says: “In the investment market, we’ve recorded £1.4 billion of transactions this quarter.
“Though this is down on last year, we expect Q4 to provide a boost to the annual total, with several sizeable transactions pending or already completed.”
Overall, Rightmove’s data shows total investment demand for UK commercial property was up 11% in the third quarter compared with a year earlier, underscoring a cautious but broad-based revival across the sector.
SUSTAINED MOMENTUM
Michael Sears, Propertymark Advisory Panel Member for NAEA Commercial, adds: “It’s encouraging to see sustained momentum in retail property investment, particularly in the high-street sector, as interest rate cuts begin to filter through the economy.
“The annual uplift in retail investment demand highlights growing confidence, especially as investors seek value in a market where pricing has become more realistic. However, despite strong headline figures, regional disparities remain.”
CONFIDENCE RETURNING
And he adds: “The broader recovery in commercial property investment, from offices to industrial, is also welcome, particularly the resilience of the industrial sector and signs of returning strength in key office markets.
“These trends support the view that confidence is gradually returning across commercial real estate, driven by improved financing conditions and occupier demand.
“As ever, commercial agents and property professionals play a vital role in helping investors and landlords navigate evolving market conditions and ensure that confidence is matched by long-term sustainability.”
