24. November 2025
As we approach the end of the year, Partners Leona Ahmed and Paul Lawrence provide a short update on the UK real estate market.
Below they discuss where international investors see value and whether next year might provide investment opportunities in the UK real estate market.
After a period of international travel meeting clients, Leona Ahmed comments on the asset classes that investors are most interested in.
"Asian and Middle Eastern investors have always invested heavily in UK real estate across various asset classes, and that continues to be the case. Having spent time in both regions in recent weeks, the interest is more circumspect until there is a clearer picture of how things shake down at a macroeconomic level.
The delay of the Autumn Budget has had an impact, and not just on real estate but inbound investment generally. Much of what is being talked about as featuring in the Budget may not directly impact commercial real estate investment, but it’s the perception that the uncertainty creates for the investors looking at the UK.
Looking at where we are in the cycle and accepting debt is still relatively expensive, there is arguably a buying opportunity. Offices are a great example. Both JLL and CBRE have reported that demand for grade A office space in London will outstrip supply over the next five years as developers have not been building out new schemes. Rental growth in the sector has also remained strong and has continued to rise post-COVID-19. Does this present opportunity for private capital (as there is less competition from institutional capital) to acquire the highest-quality assets? Certainly, for those who are long on offices this could be seen as a perfect opportunity.
Other asset classes such as Purpose-built Student Accommodation (PBSA) and Logistics continue to see strong demand, especially when assets are in prime locations. Hotels have continued to trade well, and there has been no let up in demand to buy London hotels. The occupancy rates at the prime locations have strengthened and room rates have risen. There is a paucity of centrally located ‘prime’ hotels that are on the market and those marketed have attracted numerous bidders."
With 2026 just months away, Paul Lawrence reflects on the ups and downs of the real estate market and whether next year may provide investment opportunities.
"The real estate market has faced many challenges in recent years. These have included Brexit, the COVID-19 pandemic, the war in Ukraine, inflation, and general political uncertainty at home and abroad.
These challenges have impacted the market, but they've also provided opportunities. It's easy to forget that logistics assets were once unloved, but they're now highly sought after. Likewise, student accommodation didn't even exist as an asset class as recently as 15 years ago.
When you look back at the 2008 financial crisis and how the market subsequently bounced back, you see that there were significant opportunities where to use an expression, 'fortune favoured the brave'. Fortunes were made, and indeed lost, at that time.
While today may feel different, there are equally significant opportunities emerging, whether due to market corrections (like we're seeing in Germany), or due to strategic priorities, like the UK's need to invest in residential property and data centres.
So, when is the right time to invest? History tells us that uncertainty creates opportunity. Given that, perhaps 2026 will be a year for recovery in the wider real estate sector."
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