Investors are increasingly turning to commercial property thanks to lower borrowing costs and strong market performance in areas such as heavy industry.
There’s been a 102% year-on-year increase in the proportion of lending allocated specifically to commercial property purchases from 2023 to 2024, according to internal data from mortgage lender Shawbrook.
Daryl Norkett, director of real estate proposition at Shawbrook, said: “The commercial property market is recovering after a turbulent period, with several sectors showing renewed signs of growth.
“Investors are keen to expand and diversify their portfolios with high-yield, high-income properties like commercial, semi-commercial, and HMOs.
“These assets not only offer potentially higher returns, but diversification can also help to build resilient portfolios even in uncertain markets.
“However, investors should conduct thorough research, as risk profiles can vary significantly across regions and asset types.
“Speaking with a specialist commercial broker can provide invaluable guidance on the best options available.”
Rising interest in commercial lending has been especially notable in the South East, which accounted for 30% of the total commercial purchase lending.
The region remains popular with investors due to its strong transport links, steady economic growth, and high demand.
Shawbrook’s data also reveals that semi-commercial applications have also risen, growing from 13% in 2023 to 24% in 2024, indicating a shift towards high-yielding asset classes.
