Investment activity in the commercial real estate sector has remained subdued, with year-to-date volumes down by 20% compared to the same period last year. However, overseas investor interest has surged with a remarkable 30% increase in activity over the past 12 months. Investors from North America, Europe, and Asia committed a significant £22 billion to UK acquisitionsin the year leading up to March, demonstrating a vibrant international interest in the market.

A catalyst for recovery? The influx of inbound capital raises questions about whether this will serve as a catalyst for increased investment activity across the board.

Asset values: Signs of stabilisation The beginning of 2025 has been marked by considerable bond yield volatility, with the benchmark 10-year Gilt yield hovering around 4.75%. According to recent reports from Jones Lang LaSalle, mainstream commercial benchmarks have largely remained flat over the past month.

Rental value growth: A positive outlook There’s encouraging news for rental value growth across most sectors. The latest Investment Property Forum (IPF) Consensus Forecast anticipates moderate yet steady growth over the next five years, projecting capital values to increase by 16% by the end of 2029.