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A sector-by-sector look at the UK commercial property market

As 2021 draws to a close, investors can look back at a seismic year for the UK commercial property market as the landscape underwent historic change in the face of the impact of the pandemic.

As the dust begins to settle on a tumultuous year, and investors get ready for another 12 months of challenges and opportunities, here is a brief overview of how the main commercial property sectors are performing and where the investment hot spots can be found.


Industrial property has been the big winner in 2021, encompassing logistics and warehousing sites, on the back of the acceleration of the trend for online shopping and servicing this demand. Big spending from the likes of Amazon and John Lewis is an indicator of heat in this area.

The outlook for this sector is set to remain bright as the market faces another winter framed by the pandemic and retailers continue to invest in industrial property, including in “just-in-case” logistics. An ongoing backlog of consumer demand for goods bodes well.


The office sector is rebounding as people gradually return to workplaces – data from the Q3 2021 RICS Commercial Property Monitor points to positive signs – but the market still faces some serious headwinds.

The entrenchment of working from home remains a downward pressure on the sector, as does the need to retrofit much office stock to meet the government’s desired energy performance certificate rating (EPC B) and net zero targets by 2030.


The residential property sector has shown good stability in a difficult year, buoyed latterly by a change in planning laws that is allowing the conversion of retail property, including on high streets, into residential use.

Supply for residential properties has trailed demand for many years and this trend has remained in place in 2021, with the impact of the pandemic even magnifying it in places. Build-to-rent residential property is an area to watch.


The action in this sector has been strongly focused on pandemic-led opportunities and pandemic-resistant property. The former activity is concentrated in industrial property, mentioned above, while primary supermarkets is a good example of the latter.

High-street and city-centre retail property has had a harder time of it, although the end of lockdown has brought some relief. It remains to be seen to what extent this sector, which was already in the doldrums pre-pandemic, bounces back.

Commercial property investor finance options

Navigating the commercial property investment market in 2021 hasn’t been straightforward but there have been clear opportunities for savvy and organised investors.

The ability to access capital to make purchases was and remains critical and with traditional commercial lenders remaining cautious, the flexibility of alternative finance facilities is becoming increasingly attractive for investors.

This is why it is important to have a commercial loan and mortgage lender that provides access to all available funding options.

To find out more about A&T Business Associates services for commercial property investors, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.

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