This statistic illustrates the value of the commercial property market in the United Kingdom (UK) from 2012 to 2016. It can be seen that in 2016 the commercial property market reached a value of 883 billion British pounds.

The Report Covers UK Commercial Property Market Forecast and Size. The Market is Segmented by Type (Office, Retail, Industrial, Logistics, Hospitality, and Multi-Family) and by Key City and Region (England, Wales, Northern Ireland, Scotland, London (City), and Rest of the United Kingdom).

Industrial real estate is forecast to experience the highest annualized capital growth in the commercial real estate sector in the UK between 2024 and 2028. On average, capital values for commercial property are expected to increase by 2.5 percent per year, while for industrial and logistics real estate, that figure amounted to four percent. Additionally, industrial is forecast to experience the highest return on investment in the commercial property sector.

As of the last month of 2024, the value of the commercial real estate market in the United Kingdom (UK) was almost 1.9 trillion U.S. dollars, which was an increase of about 100 million U.S. dollars compared to 2023. After Germany, the UK was the second-largest commercial real estate market in Europe.

The prime yields in the UK expanded across most property types in 2024, compared to the previous two years. Yields were the lowest in the London West End offices market at four percent. In contrast, shopping center yields stood at eight percent. Yield is an indicator for the expected return of a property investment and is calculated as the ratio of rental income and the property value. Several factors can drive yields - increased demand could raise property values, causing lower yields, while a fall in demand could create the opposite effect. Which is the largest commercial real estate sector in the UK? Office real estate has traditionally accounted for the lion’s share of the commercial property investment market, but since the start of the COVID-19 pandemic, investors’ interest has shifted towards industrial real estate. With the e-commerce sector growing and supply chain management becoming more important than ever, so has the industrial and logistic sector. This increase in importance is also reflected in the occupiers market, with the annual take-up exceeding the ten-year average for three years in a row. How is the commercial property market expected to develop in the coming years? The industrial and logistic property market is forecast to outperform retail and offices in terms of capital value growth in the period between 2024 and 2028. According to the same forecast, rental growth is expected to turn positive for all property types in 2024, except for shopping centers.

Key information about United Kingdom Gold Production

• United Kingdom Real Residential Property Price Index was reported at 113.827 2010=100 in Sep 2024.
• This records an increase from the previous number of 110.464 2010=100 for Jun 2024.
• UK Real Residential Property Price Index data is updated quarterly, averaging 54.208 2010=100 from Jun 1968 to Sep 2024, with 226 observations.
• The data reached an all-time high of 122.502 2010=100 in Sep 2022 and a record low of 21.864 2010=100 in Jun 1970.
• UK Real Residential Property Price Index data remains active status in CEIC and is reported by Bank for International Settlements.
• The data is categorized under World Trend Plus’s Association: Property Sector – Table RK.BIS.RPPI: Selected Real Residential Property Price Index: 2010=100: Quarterly. [COVID-19-IMPACT]

The industrial real estate sector is forecasted to see the highest annualized rental growth in the UK between 2024 and 2028, followed by West End offices. According to the forecast, industrial real estate rents are expected to grow by 3.2 percent per year in this period, while West End office space rents are expected to increase by 2.7 percent. When it comes to total commercial real estate returns in the UK, the industrial and retail warehousing sectors are forecast to outperform all other property types.

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Europe Commercial Real Estate Market Size 2025-2029

The Europe commercial real estate market size is forecast to increase by USD 91.4 billion at a CAGR of 5.7% between 2024 and 2029.

The European commercial real estate market is experiencing significant growth, with increasing private investment flowing into the region. This trend is driven by a number of factors, including the economic stability of European countries, attractive yields compared to other global markets, and the continued demand for urban space. However, this growth is not without challenges. 
One major concern is the rising interest rates, which have the potential to increase borrowing costs for investors and potentially dampen demand. Despite this, opportunities abound for companies seeking to capitalize on the market's dynamics. For instance, there is a growing demand for sustainable real estate, as well as a shift towards alternative asset classes such as student housing, healthcare real estate, and hospitality real estate.
To navigate this complex landscape effectively, companies must stay informed of the latest trends and challenges, and be prepared to adapt their strategies accordingly. Overall, the European commercial real estate market offers significant opportunities for growth, but also requires a strategic and agile approach to succeed.

What will be the Size of the Europe Commercial Real Estate Market during the forecast period?

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The European commercial real estate market encompasses a diverse landscape of travel-restriction resilient sectors, including warehouses and fulfillment centers catering to the in e-commerce spending. Urbanization continues to drive demand for adaptable office spaces in metro cities, with a growing emphasis on sustainable designs and technology-driven solutions. The commercial sector is undergoing digitalization, with brokers and managers leveraging media portals to streamline transactions and enhance client experiences. The hybrid work model is shaping office occupancy trends, as middle-class consumers and the working-age population adapt to flexible work arrangements. Foreign investments remain strong, particularly in sectors like logistics and data centers.
Vacancy rates, rental rates, absorption rates, and property valuations are closely monitored indicators of market health. Architects and engineers are tasked with designing spaces that accommodate the evolving needs of businesses, from flexible layouts to energy efficiency. Overall, the European commercial real estate market exhibits activity and growth, with trends leaning towards digitalization, sustainability, and adaptability.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Rental
  Lease
  Sales


End-user

  Offices
  Retail
  Leisure
  Others


Geography

  Europe

    France
    Germany
    Italy
    UK

By Type Insights

The rental segment is estimated to witness significant growth during the forecast period. The European commercial real estate market is experiencing a significant shift, with the rental segment leading the way in 2024. Office rental growth in Europe accelerated to 1.8% quarter-on-quarter in Q3 2022, resulting in an annual increase of over 5%. Notably, the UK, Benelux markets, and peripheral Europe experienced the highest growth rates. However, investment markets are showing caution, as buyers hesitate to pay earlier price levels due to economic uncertainties, inflation, and finance rates. Urbanization and social distancing measures continue to impact commercial real estate, driving the need for adaptable office spaces and sustainable designs. The commercial sector is also undergoing digitalization, with technology-driven solutions, smart building technology, and data analytics gaining popularity.

Additionally, e-commerce spending and changing customer behavior are leading to increased demand for warehouses, fulfillment centers, and logistics facilities. The Middle-class consumers and the working-age population's digitization of work further fuel the demand for managed office facilities, collaborative spaces, and digital infrastructure. Key trends include hybrid work patterns, energy-efficient features, green building certifications, and sustainable construction methods.

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The rental segment was valued at USD billion in 2019 and showed a gradual increase during the forecast period.

Market Dynamics

The Europe commercial real estate market is diverse, encompassing a wide range of property types, from office space leasing to industrial warehouse sites. Retail property deals and urban retail units remain a signifi

The number of non-residential property purchase transactions in the UK fell to a record low in April 2020 due to the coronavirus (COVID-19) pandemic. In the second half of 2020, transaction activity recovered and in September 2024, the number of seasonally adjusted transactions amounted to 10,250.

Graph and download economic data for Consumer Price Index: Retail price Index: All Items for the United Kingdom (CPRPTT01GBQ661N) from Q1 1960 to Q4 2017 about United Kingdom, all items, retail, CPI, housing, price index, indexes, and price.

Graph and download economic data for Consumer Price Index: Retail price Index: All Items Less Mortgage Interest Rate for the United Kingdom (CPRPTT02GBQ661N) from Q1 1975 to Q4 2017 about mortgage, United Kingdom, all items, retail, CPI, interest rate, interest, housing, rate, price index, indexes, and price.

Germany, the UK, and France had the largest commercial real estate markets in Europe in 2024, amounting to almost half of the European market. The market size is based on the value of high-quality real estate as a percentage of each country’s GDP. In Germany, the market size of commercial real estate was about 1.9 trillion U.S. dollars.  Investment in commercial real estate Although the United Kingdom had a smaller market size than Germany, it recorded a higher commercial real estate investment volume in 2023. Due to the unfavorable economic climate, transaction activity declined markedly that year, affecting the whole region. Many countries, such as Germany, Sweden, and Italy, saw investment plummet by approximately 50 percent. Most popular European cities among real estate investors Industry experts consider a broad range of factors when allocating capital to real estate assets. Transport connectivity and a city’s economic performance, however, stood out as most important, according to a 2023 survey. Unsurprisingly, the capital cities of the UK, Spain, and France ranked as the European cities with the highest real estate prospects in 2025.

United Kingdom Retail Price Index: Weights: Housing: Mortgage Interest Payments data was reported at 24.000 Per 1000 in 2018. This records a decrease from the previous number of 25.000 Per 1000 for 2017. United Kingdom Retail Price Index: Weights: Housing: Mortgage Interest Payments data is updated yearly, averaging 40.500 Per 1000 from Dec 1975 (Median) to 2018, with 44 observations. The data reached an all-time high of 76.000 Per 1000 in 1991 and a record low of 23.000 Per 1000 in 1978. United Kingdom Retail Price Index: Weights: Housing: Mortgage Interest Payments data remains active status in CEIC and is reported by Office for National Statistics. The data is categorized under Global Database’s UK – Table UK.I012: Retail Price Index: Weights.

As of June 2024, the German residential real estate company Vonovia SE had the largest net market capitalization in the FTSE EPRA Nareit Developed Europe non-REIT index with almost 18.5 billion euros. In the REIT index, the United Kingdom (UK) industrial real estate company Segro ranked first at almost 14.2 billion euros.Real Estate Investment Trusts (REITs) are companies which are listed on the stock market and facilitate direct real estate investment. REITs usually distribute at least 90 percent of their taxable income to shareholders and in return pay no corporate tax. Not all public real estate investment companies are domiciled in countries with REIT legislation, and not all choose to opt for REIT status. These companies are referred to as non-REITs.

This statistic shows the levels of the monthly index of total returns on investments in different types of property (retail, office and industrial real estate) on the United Kingdom market as of July and August 2015. During those months all indexed returns increased. For the industrial property it reached the level of 2080.3 index points.

Property Market Insights from Zoopla Live (Aggregated):

Discover valuable property market insights with our data product sourced from Zoopla Live, one of the UK's premier aggregators of property listings data. Gain access to a comprehensive dataset containing information on 27,000,000 homes, up to 1,000,000 property listings,.

The Urban Big Data Centre (UBDC) systematially collects daily property listings from Zoopla across the entire UK since 2017; and each year, we process and consolidate the collected data into yearly aggregated and harmonized 'analysis-ready' datasets.

Researchers can utilize this dataset to unlock meaningful insights into the property market.

Please note that additional daily data from Zoopla can be made available upon request if the provided aggregated product does not meet specific research requirements. Additionally, it's essential to be aware that each Zoopla year spans 18 months, from the 1st of Oct of the previous year until the 31st of March of the following year.

UBDC’s Zoopla data collection is a dataset that covers housing data since 2017, covering the area of Great Britain. UBDC has an agreement with Zoopla and has access to current property listings via Application Programming Interface (API). We have been collecting the listings since August 2016.

UBDC can provide Live Collected Aggregated Data: Aggregated (yearly) data made from Live Collected data. The Zoopla year is +/- 3 months for each year(= zoopla year 18 months) The collection requires unique property id in the API request.

We have also set up an email discussion list on housing data and related issues that you can join via the JISCMail website:

https://www.jiscmail.ac.uk/cgi-bin/webadmin?A0=UBDC-HOUSING-DATA

Note: In accessing this data, you agree that any downloading of content is for non-commercial reference only. No part of these materials may be used for any other purpose or reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior consent of the University of Glasgow.

Data is Zoopla Property Group PLC, © 2023, processed by Urban Big Data Centre, University of Glasgow

Details of the data available via Zoopla’s Application Programming Interface (API) can be found at

http://developer.zoopla.com/

Industrial multi-lets and industrial distribution properties had the lowest yields in the industrial real estate sector, amounting to 5.25 percent in February 2024. Conversely, yields were the highest for retail warehousing (restricted), at 6.25. Yield is an indicator for the expected return of a property investment and is calculated as the ratio of rental income and the property value. Several factors can drive yields - increased demand could raise property values, causing lower yields, while a fall in demand could create the opposite effect. Overall, yields expanded across all commercial property types in 2023.