As far as 2023 goes the writing has long been on the wall for the commercial property sector. It has been an incredibly challenging 12 months, with key sectors struggling throughout. But it hasn’t been all bad news – there are bright spots and good deals for investors to pursue.

New deals signpost growth for warehousing and logistics

New research from Sirius Property Finance underlines how tough a time it has been for market. According to these new figures, the total value of UK commercial property deals fell a staggering 73% in the past six months to £3.7 billion.

Nevertheless, it’s not all doom and gloom. While warehousing and logistics hasn’t escaped the fallout out of the continued economic malaise, the sector has been a rare source of positivity. News that British Land has secured planning consent for a 140,000 sq. ft. multi-level, mixed-use last-mile logistics hub in south London is testament to the resilience and potential of this space.

Notably, it follows an announcement from Lidl of plans to build its largest warehouse in the country in Luton. The location of the British Land site close to south and central London is telling, with proximity to business centres and transport nodes now firmly established a key consideration for the development of such complexes, along with sustainability.

Life sciences and retirement living continue to stand out

Away from warehousing and logistics’ headline act, a sector whose potential has somewhat flown under the radar, until more recently at least, is life sciences. The profile of this market continues to grow, with factors such as a lack of existing facilities, longer-term tenants and premium rents helping to attract investment.

Retirement living also remains a stable investment choice, not least as the population continues to age. In line with trends across the market, a number of factors are integral to good investment in this space. Sites that meet growing sustainability demands are set to become increasingly attractive, while there is also an emerging trend for building diversity into the later-living offer to suit a more culturally diverse population.

New Sainsbury’s deal signals future of big retail investment?

Returning to the market’s traditional cornerstones, recent developments have shone a light on how the market may evolve going forward. With economic conditions weighing heavy on the retail sector, a number of major retailers have looked to switching use to generate value from their property portfolios. John Lewis has been notably among them.

The recent deal involving Ballymore and Sainsbury’s is perhaps the next step on this journey, with diversification key to new investment. The two have announced a deal to develop a key brownfield site in west London that will feature homes, retail space, community amenities and workspace. The retail space will include a new Sainsbury’s store.

As for the high-street, the picture remains gloomy, with the collapse of Wilko the latest blow. As such, it hasn’t been surprising to see landlords taking advantage of being able to switch to residential or leisure use. Given this backdrop, it will be interesting to see how investors react to the news that Wetherspoons has placed another round of 11 pubs up for sale. All of the pubs are located in town and city centres.

Property deals, accessing finance and your commercial loan partner

It continues to be a tough market for investors, but as has become increasingly clear throughout the year, there are still opportunities for savvy spenders to target. Of course, for commercial property investors, finding the deals if only half the battle – accessing capital in the current climate is far from easy.

This is why it is essential that investors can call on the right commercial loan and mortgage lender. Given the state of the market and growing caution from mainstream lenders, a commercial lending partner that can provide affordability, flexibility and manageability is vital.

To find out more about A&T Business Associates services for commercial property investors, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.