The problem with the state of the UK commercial property investment market in 2025 is that you could argue that a continuing succession of shocks and uncertainty are challenging even the concept of a green shoot.

We did start the year in a reasonably positive frame of mind, albeit one that had been tempered by the hit to business confidence that the Autumn Budget delivered. Prime commercial property prices still looked comparatively cheap, and the industry went off to MIPIM with a spring in its step and a feeling that this year would be the last chance to buy at the bottom of the cycle. Then came the Spring Statement, which while it wasn’t as negative as some worried it might be, still left the door firmly open to tax rises in the autumn.

We then add in the turbulence and uncertainty around President Trump’s “Liberation Day” and proposed tariffs, which some commentators suggest could herald the biggest change in global trade patterns for more than 100 years. The key word in the previous sentence for investors in UK commercial property is “could”. I am pretty certain that the tariffs announced on 2 April will not be the ones that we end up with, but how long it takes for the final deal to emerge is another kick to the roots of those potential green shoots. Yet again, we have the perfect set of reasons for investors who might be looking for a justification to not make a decision, to delay their sale or purchase until ‘things are clearer’.

So, where does this leave our forecasts for the commercial property market? Back in January we predicted that the lack of development activity across all sectors would deliver above average prime rental growth over the next five years, and a potentially weaker economic outlook does not change our view on this. Yes, slower global and domestic GDP growth does imply a downward revision in take-up forecasts, but given the lack of supply this will not be enough to affect prime rental growth.

On the investment side of the property world I do think that uncertainty has increased, but this will not deliver a significant change to our prediction that UK commercial real estate investment turnover will be up 20% this year. Real estate investments look cheap, and the fear of missing out on the bounce will be too much for investors who need high returns to ignore. Furthermore, it wouldn’t be a huge leap to suggest that some parts of the property market are unconnected to the trade in goods, so business performance and tenant demand will be less affected by tariffs.

Returning to the concept of the traditional spring comment on green shoots, I don’t think that the Spring Statement or US tariffs are the frost that will kill off the recovery. The highly cyclical nature of the UK property market means that 2025 still offers the opportunity to buy income or create returns at a comparatively cheap price.

Further information

Contact Mat Oakley

UK Cross Sector Outlook 2025: Commercial