Commercial property remains a solid, tangible investment and, with interest rates and inflation reducing, there are seeds of light appearing in the market, along with a modest improvement in the lending environment.
So, how are the various commercial sectors performing? Vanessa Penn, Managing Director, shares her views for the coming year...
Industrial
There is consistent demand for prime and secondary industrial property, and values are holding steady, broadly speaking – although there remains a lack of stock overall. In the prime industrial sector, rents are anticipated to grow.
Retail
Some High Streets have seen better rates of occupation than others, although there is caution amongst retailers, with relief on business rates reducing.
There is reasonable demand for smaller private investment stock under £5 million lot size. Secondary retail remains in negative territory.
Office
Offices need to be of good quality and offer flexibility, but secondary space remains a challenge.
Working from home and the advent of AI – putting pressure on traditional employment practices – has meant that fewer offices are required, and these need to be attractive to those who are being encouraged to attend work in person, providing staff facilities, access to amenities and close to transport connections.
Development
Very few speculative schemes are viable, with build costs increasing pressure on developers’ profits, and reducing affordability.
Loss of confidence and the impact of higher fuel prices is impacting the commercial market, with occupiers delaying decisions on expansion.
However, ‘Change of Use’ planning permission is being sought by an increasing number of developers, which is breathing new life into ‘challenging’ second-hand buildings. An example of this is Waterfront House on Ipswich’s popular Waterfront, which was sold in early 2025 and has received approval for conversion from redundant offices to a visitor attraction, due to open in 2028.
Investment
Investors seem to be biding their time, in anticipation of prices falling across all sectors. The market is vulnerable due to geopolitical events and the detrimental impacts of various wars and conflicts.
Suffolk
The market is unpredictable and notably, in Suffolk, there is a lot of anticipation around the Sizewell C project and the enquiries that it will generate in time.
The 1 million sq ft Orwell Logistics Park is now fully occupied by Sizewell C, and suppliers and contractors will be seeking satellite offices, warehouse units and outside storage for the project, which is expected to last 10-15 years.
However, the time frame for these anticipated commercial property demands has yet to be determined.
For all your commercial property requirements, large or small, please contact the Penn team on 01473 211933 / This email address is being protected from spambots. You need JavaScript enabled to view it. / www.penncommercial.co.uk