The recovery of the retail sector in the UK continued in the third quarter of the year, according to the latest data from commercial property website Rightmove.
Demand to invest in retail property was up by 30% compared to the same period in 2024, measured by enquiries to commercial agents about listings. At the same time, supply of retail property fell by 2%.
The figures build on the momentum from last quarter, where demand to invest in retail property was up by 35% compared with the same three-month period in 2024.
High-street retail investment demand, which makes up a large proportion of the retail sector, was up by 45% compared to the same quarter last year. That is down slightly on the Q2 year on year figure – at 56% – but is nevertheless robust.
The renewed interest in investment in the retail sector is the result of multiple factors, most importantly continuing – albeit cautious – cuts to the Bank of England’s Base Rate. The Base Rate was last cut to 4% on 7 August, its fifth reduction since August 2024.
Outside of the retail sector, the office market is also continuing its recovery, with demand to invest in office space up by 31% compared with last year, and demand to lease office space up by 7%.
Several key London markets have seen big boosts in leasing demand, including Westminster, the City of London, and Hackney.
The industrial sector continues to lead the way as it has done throughout the year. The latest snapshot of the sector shows that demand to lease industrial space is up by 29% compared with the same period last year, while investment demand is up by 53%.
Bank Rate cuts are supporting a broader recovery in commercial property investment in the UK. According to Rightmove’s data, overall demand for investment in commercial property was up 11% year on year in Q3. The equivalent figure for the second quarter was 20%.
Andy Miles, Rightmove’s managing director of commercial real estate, 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.”
Michael Sears, Propertymark Advisory Panel Member for NAEA Commercial, comments: “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.
“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.”
