By Caroline Luxmore, Chief Commercial Officer, Recognise Bank.
Rightmove’s latest Q4 2025 data shows that demand for UK commercial property is still rising, even as the wider economy remains uncertain.
Investment demand for industrial fared best with a 12% increase, followed by offices (4%) and retail (3%).
Growth in demand was lower than in both the previous quarter and the same period last year, which was in part down to the timing of the Labour government’s second Budget, which took place on 26 November.
Several UK markets experienced notable boosts in office demand, notably Scotland (27%), Wales (22%) and the South East (10%). The industrial sector continued to perform strongly. Demand to lease industrial space rose by 11% year-on-year, with demand to invest up 12%.
Steady demand for commercial property
At Recognise Bank, we’ve seen a steady stream of bridging finance enquiries and deals completing on commercial property assets, as bridging finance gives investors the means to secure assets, tidy up ownership or refinance short-dated debt while longer-term funding, sales or planning outcomes are put in place.
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Recent examples include a £644,000 commercial bridging loan secured on a parcel of green amenity land in East Anglia. The site was earmarked for a development of at least 44 affordable homes. The borrower, a long-established building contractor, was close to securing planning consent. The process had taken longer than expected and although a decision was due, the existing lender declined to renew or extend its facility. Previous planning permission under a different owner had already lapsed.
Another was a £1.75m bridging loan to support the expansion of a Teesside-based manufacturer and retailer of joinery and stair components. The business had recently changed hands and the new owners needed to settle a deferred payment linked to the acquisition and so the challenge was time. There was a refinancing deadline and due to structural points around the business and security, other lenders were not able to provide the required facility within the window available.
The deal allowed the new owners to honour their purchase obligations, secure the future of a long-standing North East business and support further growth and investment in local jobs. As our lending manager noted at the time, this was a “strategically important acquisition” where swift, workable funding made the difference between success and failure.
Demand for commercial property is also supported by data from auction house Allsop. It recently reported that its February commercial auction sales raised £40m from the sale of 52 lots, with an overall success rate of 87% and 11 lots achieving prices of £1m or more. The average lot size was £771,000, and retail assets accounted for 54% of the total value raised. Regional properties also delivered a robust performance, with 27 lots sold outside of London and the South East, contributing £19.1m to the overall total.
As Rightmove and Allsop’s latest insights show, there is no shortage of interest in good-quality commercial assets across retail, office and industrial sectors. The question is whether the finance market can keep pace with that demand, especially where deals are complex or time critical.
Lenders, like Recognise Bank, have an important part to play. We combine speed and clear credit thinking with our strong broker partnerships. In doing so, we can help turn growing interest in commercial property into completed deals, new homes and stronger local businesses.
Short-term finance can and does support long-term growth in the SME market.
ENDS
