London Commercial Property – January Round-up

January 2026 London commercial property market shows signs of recovery with strong occupier demand for prime, ESG-compliant offices and retail outperforming expectations. While 2025 ended with a “wait-and-see” approach following budget uncertainties, 2026 is expected to see improved investment sentiment driven by anticipated interest rate cuts.

Office Market

• Demand & Supply: Office demand remains robust, particularly for high-quality, prime locations, with a shortage of new, high-specification, sustainable space in key London areas.
• Rental Growth: Rental growth is expected to continue but at a more moderate pace, with 2026 forecasts around 3.8% for London.
• Trends: “Prime” has become more location-specific, and in some instances, a perfect location can compensate for a less-than-perfect building, notes Savills.

Retail & Logistics

• Performance: The retail sector performed well in 2025, recording a total return of 9.6%, with shopping centres and food stores leading the way.
• Outlook: While retail vacancy rates are down, rental growth might soften slightly as occupiers navigate higher operating costs, but the sector remains defensive.
• Industrial: London is expected to outperform in the industrial sector, with forecasts of 4.1% for 2026.

Investment & Policy

• Investment Activity: A pick-up in investment volumes is expected in 2026 following a slower 2025, particularly as interest rates are predicted to fall.
• Policy Changes: A new five-category business rates multiplier structure comes into effect in April 2026, marking a significant shift for occupiers in retail, hospitality, and leisure.
• Key Focus: Investors are focusing on core, prime assets, driven by ESG considerations and the risk of secondary assets becoming stranded due to tightening EPC regulations.

just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here.

just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here. just enter new article here.