News 3min(s)

UK Commercial Property Outlook 2025: Developers’ Insights

Our latest research shows that confidence is coming back to the UK commercial property market. Property developers see senior living developments as a key investment opportunity for future growth.

Modern residential houses in a row

At a glance

  • 66% of developers believe the UK commercial property market will improve over the next 12 months
  • 42% believe the retirement living sector will be most profitable

Developer Sentiment on the Commercial Property Market

A third (66%) of property developers believe the commercial property market will improve over the next 12 months. Of these, 19% expect significant improvement, while 47% anticipate slight growth. This renewed optimism follows a generally positive year in 2024. 64% of developers agree that the market had already improved - 11% significantly and 53% slightly.

Top Commercial Development Investment Opportunities

Looking ahead, developers view retirement living projects as the most promising investment opportunity. 42% of developers identify the sector as the most profitable area for driving commercial property growth. Other sectors expected to contribute to growth include:

  • Hospitality and leisure (37%)
  • Retail units in cities, towns and high streets (32%)
  • Student accommodation (31%)
  • Semi-commercial units (30%)
  • Out-of-town retail units (23%)
  • Warehousing (22%)
  • Hospitals (19%)

Our Experts Say

Terry Woodley, Managing Director of Development Finance at Shawbrook, added:

“The data reflects a changing landscape for developers where demographic trends and economic challenges are shaping demand across different types of commercial property.

“As developers seek stable returns and long-term value, the retirement living sector stands out as a key focus area, aligning with the UK's aging population and evolving housing needs. Developers will also have a key part to play in helping the Government achieve its lofty housebuilding targets, which requires a collective, multi-pronged approach to provide adequate housing for different generations and demographics.

"Despite economic headwinds last year which have carried through to 2025, developers have proven themselves to be agile and resilient - with the majority being able to grow their businesses. This trend looks set to continue in the second half of this year, as many diversify their projects and build robust income streams.”

Dasos Kirtsides, Head of Healthcare at Shawbrook, added:

“The retirement living sector has proven remarkably resilient in recent years which have been marked by economic headwinds, numerous regulatory changes and volatility in the wider markets.

"As we look forward to the rest of 2025, the signs are really positive. With the economy growing and the most recent interest rate cut easing the cost of debt for operators, the sector is well set for growth. As part of the Government’s housebuilding plans, flexible and innovative solutions are needed to provide adequate retirement living options, which presents an excellent opportunity for property developers.”

Funding Senior Living Development Projects with Shawbrook

At Shawbrook, we understand the unique challenges developers face when funding senior living projects. Our dedicated Development Finance and Healthcare Finance teams work closely together to provide tailored, flexible funding solutions designed to bring developer’s visions to life smoothly and efficiently.

By combining deep expertise in property development with specialist knowledge of the healthcare and senior living sectors, Shawbrook offers a comprehensive financing approach that supports every stage of the project.

Explore how we’ve supported developers in delivering successful senior living projects through our case studies:

Partner with Shawbrook to access the development finance expertise and healthcare sector knowledge that could help power your next senior living project. Contact us today to find out how we can help fund your development goals.

Methodology

Research was conducted by Censuswide between 06.02.2025 and 24.02.2025, surveying 568 property developers aged 18+ across England, Wales, and Scotland.

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