The industrial sector continued to lead the way for commercial real estate in the UK with demand to lease in Q4 up 11% year on year and demand to invest up 12%.

Overall demand for commercial leasing and investment remained in positive territory, despite the uncertainty caused by November’s Budget, according to Rightmove’s latest Commercial Insights Tracker.

Growth in demand was lower than in both the previous quarter and the same period last year. However, it says this was in part down to the timing of - and extensive speculation about - the Budget.

Positive

Rightmove’s managing director, commercial, Andy Miles, believes there are positive signs ahead for the rest of 2026. “Not only is demand largely higher than last year, but we are expecting to see further interest rate cuts starting later this year, which would help to make commercial property investment more attractive and viable to some investors,” says Miles.

“It’s still a difficult cost climate for many businesses, but stable demand to lease commercial space and interest rate reductions for investors would help to create some momentum for the 2026 market.”

Offices

Demand to lease offices increased by 2% and for leisure by 1% but fell 4% for retail properties. When it comes to investment demand, offices and retail were up 4% and 3% respectively, while leisure fell by 7%.

At the same time, supply across all sectors ticked up when it came to leasing and all but leisure in terms of investment. At a time when demand is muted - or at least more muted - this is, perhaps, to be expected, according to Rightmove.

Demand to lease office space in some of London’s key business locations dropped by more than the national average, another signal that some business leaders adopted a wait and see approach at the end of 2025 due to the Budget. In the City of London it was down nearly a quarter compared to the same period a year ago (-24%), while Westminster saw a drop of 8%.

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