Birmingham, Manchester and Glasgow all offer unique commercial property opportunities, with yields forecast to peak over the next 12 months, according to lender Together.
Its latest report, titled Cities in focus 2025: Commercial property insights, has tracked a growing appetite for investment in shops, offices and student housing across the three regional cities.
Ryan Etchells, chief commercial officer at Together, said: “Our research highlights an overall optimism across the commercial property market. While London continues to retain its appeal for commercial property investors and developers, it’s clear there are regional cities that are becoming increasingly attractive, and we would expect this interest and investment to continue over the next five years.”
Birmingham topped the list of the best cities outside of the capital for commercial property investment this year, thanks to its diversity. A survey, conducted by Together along with 500 commercial property investors and developers, has found 78% of property industry players would buy into student housing, with 70% also favouring investing in retail and office space across the city.
The retail sector currently makes up 21% of all businesses in Birmingham, making it the largest single sector by number, with shopping at the Bullring and Grand Central recording 32.7m and 14.3m annual visits, respectively. According to the survey, 40% of commercial property professionals said consumer demand and footfall were the most important factors in influencing their investment decisions.
For offices, Together tracked 843,218 sq ft leased in 2024, marking the highest amount since 2017. Prime rents hit £42.50 per sq ft and are expected to exceed £50 per sq ft by 2027.
Etchells said: “There is a sense that the commercial property sector has turned a corner, with a shift back to office or hybrid working, business confidence rebounding to its highest level in nine months and renewed optimism over growth in the UK’s economy – all positive signs.”
In Manchester, 77% of those surveyed believed investing in retail space over the next five years represents a good opportunity. This included bars and restaurants on the high street, retail parks and shopping centres.
When it came to retail, 37% of respondents pointed to the impact of e-commerce and 23% to the shift to experiential and service-led retail as the most important factors when making retail property investments.
In addition, 40% said semi-commercial properties, for example a flat above a shop, provided an attractive opportunity in Manchester. The move comes as the city, alongside the wider North West region, continue to surpass national averages for both house prices and rents, with 67% of Manchester’s landlords anticipating further increases in yields over the next 12 months.
In Scotland, Together’s survey found Glasgow’s retail offering would appeal to 80% of property industry players, with 28% of the survey respondents noting more high street chains and restaurants cropping up across the city centre in the last 12 months.
Over a quarter of those surveyed noted they would buy into experiential shopping in Glasgow, where the in-store journey isn’t just transactional but immersive, interactive and engaging, as well as fostering brand loyalty and advocacy.
Etchells concluded: “It’s crucial property professionals continue to seek out flexible financial support to help them seize opportunities to grow and diversify their commercial portfolios, ensuring they can leverage all available opportunities – and the specialist lending sector is in a prime position to provide the finance needed to achieve their ambitions.”
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