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Categories: prs | property market | commercial mortgages
Data from Rightmove and other sources show that the commercial property market is growing rapidly, prompting demand for commercial mortgages.
Rightmove attributes this surge of market activity to favourable mortgage interest rates.
Offices back in demand
In its Quarterly Commercial Insights Tracker, Rightmove revealed that demand for rental offices has increased by 19% since the first quarter of 2024, matching pre-pandemic levels.
Since the COVID pandemic, more companies across many sectors are looking to bring employees back to the office.
Office working allows companies to more closely monitor employees’ productivity. Businesses also want to foster more collaborative working cultures.
The report also indicates that tastes in working spaces have grown more discerning, among both employers and employees. Sleek, modern office spaces with accessible amenities and plenty of open space are most sought-after.
Location is important too, as offices in city centres remain popular. However, office blocks with older, less energy-efficient infrastructures are struggling to meet workers’ expectations, according to the Rightmove report.
Ironically, despite an overall shift towards modernity in the commercial property sector, there are reports that retro office design principles are also making a comeback.
Many workers grew accustomed to the quiet solitude of working from home, so the bustle of busy offices can be too distracting for some. Office cubicles are therefore in high demand.
Opportunities for private landlords
In addition, a recent poll by the National Residential Landlords Association (NRLA) found that 40% of private rental sector (PRS) landlords have bought commercial property, or are seriously considering doing so.
Of that portion of respondents, 35% said that commercial property investments had potential to be an important part of their private property portfolios.
Stephen Page, a partner at a specialist commercial property estate agent, talked about the positive state of the market:
Post-pandemic, modern offices have become lifestyle spaces rather than just somewhere that people spend the hours of nine to five.
There is also greater demand from medium-sized businesses for offices that are fully furnished and ready-to-go, rather than needing the time and upfront costs for businesses to fit themselves. Landlords have responded to this by offering turnkey solutions across their portfolios.
If you have an offer accepted on a commercial property, either for your own or another business to inhabit, contact our specialist commercial mortgage brokers today to explore the available products.
