UK Commercial Real Estate Market Size (2024 - 2029)

UK Commercial Real Estate Market Analysis

The UK Commercial Real Estate Market size is estimated at USD 149.67 billion in 2024, and is expected to reach USD 184.80 billion by 2029, growing at a CAGR of 4.31% during the forecast period (2024-2029).

• High inflation is putting more pressure on companies to cut costs, prompting them to focus on increasing productivity and reducing costs. More than seven in ten (75%) respondents to the Quarterly Industry Survey (Q3 2023) of the Research, Information and Consulting Society (RICS) predicted that corporate cash flows would continue to deteriorate over the next 12 months. This, combined with the long-term effects of the “work from home” revolution, means many companies are still evaluating their real estate footprint – though the extent of downsizing is very business-specific.
• According to Remit Consulting, office occupancy levels stabilized at around 30% over the past year, and a three-day workweek appears to be the new norm. However, there needs to be more evidence for any long-term changes in office attendance. Employee demand for hybrid working continues to grow. For instance, according to a recent Remit Consulting survey, 69% of staff say they enjoy working from home, but almost 60% say they would consider quitting if they were required to work from home. Similarly, a Deloitte study found that more than 75% of the Gen-Z generation would consider looking elsewhere if asked to go back to the office five days a week.
• While corporate real estate is second only to salaries for many companies, the need for high-quality space continues to drive recruitment, retention, productivity, and staff health and well-being. This is why there continues to be a strong need for high-quality space.
• Due to a combination of evolving occupier needs and legislation, the overall amount of office space required will be lower in the future, with a greater emphasis on high-quality buildings meeting these corporate and regulatory needs. Life sciences and technology have played a key role in sustaining market growth. New technologies such as AI will further enhance the importance of offices as a high-quality environment.

UK Commercial Real Estate Industry Segmentation

Commercial real estate is a property used exclusively for business-related purposes or to provide a workspace rather than as a living space. Most often, commercial real estate is leased to tenants for income-generating activities. In general, it includes buildings used for commercial purposes, including office buildings, warehouses, and retail buildings (e.g., convenience stores, 'big box stores, and shopping malls).

The UK commercial real estate market is segmented by type (office, retail, industrial and logistics, hospitality, and other types [schools and recreational areas]) and key city and region (England, Wales, Northern Ireland, Scotland, London [City], and the Rest of United Kingdom). The report offers market size and forecast values for the UK commercial real estate market in value (USD) for all the above segments.