Commercial property has been moving back up the agenda for lenders, brokers and investors throughout 2025 and into 2026. After a lengthy period of price adjustment and subdued sentiment, the market has become more optimistic. However, Q1 2026 has had more than its fair share of global ups and downs, meaning that despite growing interest in commercial property, a caution is still the name of the game.
Capital is starting to move again
Globally, there are strong signs of an uplift in investor appetite for commercial property as the sector has entered sustained recovery from the ashes of the post-covid era. In the UK, the CBRE has forecasted net total returns of around 8.5% for prime real estate.
Interest rate expectations have played a role in these predictions and, but after the market’s rocky Q1 2026, these projections are likely to be less positive than originally hoped for. For now, however, there is no sign of a dramatic turnaround in the direction of growth, just a flatter curve.
Is the commercial property resurgence still on?
The past couple of years have seen a slow turnaround for the commercial property market, marked by a greater volume of commercial mortgage applications overall, despite commercial property values that had fallen about 20% from their peak.
Well-placed prime property with strong covenants have been the most sought-after and strongest performing assets, however they have not been easy to come by with opportunities being snapped up as soon as they appear. This trend is most clearly seen in Central London, but Outer Prime London has also seen an uplift in occupational demand.
While property prices had been in decline before what many feel is a turnaround point, rents have kept growing slowly. This has meant yield growth for the right properties, attracting investors prioritising short term returns in their investment strategy.
Owner-occupiers who have capital available to set up their own space have typically placed emphasis on well-suited locations more than the overall quality of the property. This has given them more bargaining power, allowing them to purchase property at already subdued prices in areas where sales have slowed while tipping the scales ever-so-slightly in their favour as well.
Global events in early 2026 have muddied the water which is prolonging the period of uncertainty that has dominated commercial property landscape in recent years. Uncertainty does not necessarily mean unwelcome news for investors, however. Those who are able to take advantage of top opportunities are still likely to be the winners overall. What we will have to wait to see is how businesses, and by extension tenants, will respond.
If demand slows, commercial properties prices and rents may both experience further downward pressure. That would further entrench the flight to quality that has been prevalent in the market as investors prioritise properties where yields are growing despite overall volatility in the market.
Choosing a lender in the current market
Nevertheless, there is still plenty of opportunity in the market for investors and owner-occupiers who can spot a deal that works for them based on location, asset quality and, for investors, rental covenants.
However, quality assets remain likely to be snapped up quickly, meaning that speed is of the essence. Lenders who have built speed into their proposition will have more to offer clients looking to set up long-term finance.
In some circumstances, investors who have clear long-term goals may even turn to bridging finance as a short-term solution to acquire top assets while biding their time in the hope that the rate environment improves before refinancing onto a commercial loan. Having access to a lender who does both can smooth out this process and provide more peace of mind for the borrower – especially since there will be clear cohesion between products with underwriting that takes the entire picture into account.
West One’s commercial proposition is well suited for those who look to purchase or remortgage in the current changing rate environment. We have made a commitment to respond to all communication within 24 hours to make sure we keep commercial cases moving and have experience completing with tighter deadlines. Meanwhile, we have strong cohesion between our short-term finance and commercial mortgage teams to be able to serve clients who believe they can benefit from a blended approach.
West One is ready to serve your clients looking to secure a commercial mortgage. Call 0333 123 4556 or email commercial.term@westoneloans.co.uk to make an enquiry.