On 23 January 2025, Dentons held its annual commercial property market predictions event, where a panel of industry experts shared their insights on the year ahead. This report combines their unique perspectives with our in-house analysis to provide a comprehensive outlook for the next 12 months.

Keynote speaker Dominic Silman (Director of Research, LaSalle Investment Management) along with our expert panel – Ross Blair (Senior Managing Director, Hines); Marine Guerin (Director, Real Estate Private Equity, Arrow Global); Jess Tomlinson (Managing Director, Head of Real Estate and Housing, Lloyds Bank); and Shelby Weiss (Principal, GREYKITE) – joined Dentons' Rob Thompson and Jayne Schnider to discuss what lies ahead for the property market in 2025.

At the beginning of 2024, there was a sense of optimism – we predicted a year of “ready, steady, go”. That prediction came true in many ways but not exactly as expected. Interest rates did come down a bit, the election had minimal impact on confidence and transactional volumes were up, just not as far as hoped. Hence, 2024 leaned more towards “steady” than “go”.

Stepping into 2025, last year’s optimism has evolved into a subtle confidence within the market. This sentiment is encapsulated in our three themes for the year ahead, namely: opportunity; conviction; and power.

Opportunity

The big picture

Taking a broader view, the UK commercial real estate market remains attractive compared to other markets, particularly in Europe.

Political stability, strong investment messaging, transparency and the opportunity created by rapid price corrections over recent years have primed the market for a rebound in 2025. The consensus is that transactional volumes will continue to recover steadily and that the perse pipeline of opportunities in the UK across a whole range of asset classes will give the market a competitive advantage.

Interest rates

2024 did not see interest rates fall as far as predicted. Going into 2025, there is confidence that interest rates will come down, though more slowly than desired.

Availability of debt

There was substantial debt liquidity in 2024 and this trend is expected to continue into 2025.

Conviction

Conviction versus opportunity

While short-term market dynamics, such as interest rates, will influence the decisions of opportunistic players, our panel discussion highlighted that the 2025 market will also be significantly shaped by conviction-driven participants.

Value-add strategies

A key aspect of conviction investment involvesimplementing a long-term value-add strategy.

Power

A few years ago, the power capacity of a site was seldom a priority in due diligence, if considered at all. Today, it is often one of the first enquiries, especially for digital infrastructure assets and industrial premises. Power availability directly affects the viability and value of many projects, from data centres to EV charging stations.

Climate change

The counterpart to power connections and consumption is sustainability. While climate resilience and sustainability may not dominate debates as they once did, this likely reflects their integration into the core of real estate thinking.