Is now a good time to buy or lease a retail property?

What is happening in the retail property market?

UK retail property values fell significantly through the late 2010s and early 2020s – down more than 30 per cent on average compared to a decade ago, with a further drop of around 22 per cent during the 2022 interest rate shock. Since 2023, however, the market has stabilised and shown signs of recovery, with investment activity picking up and performance improving in a number of locations. The picture varies considerably by asset type and geography, but the period of sustained decline has largely run its course.

Across many regional markets, values and rents remain well below the levels of a decade ago. That repricing, combined with improving sentiment and recovering investment activity, is what makes the current moment worth paying attention to for buyers and occupiers alike.

For a broader view of the current commercial property landscape, our guide to buying commercial property sets out what the process involves and what to consider before making a move.

Is now a good time to buy retail property?

For businesses and investors with the means to purchase, the current market presents a genuine opportunity. Values are, by historical standards, low. That does not mean all retail property is a sound investment, but well-selected assets can be acquired at a price point that may look attractive in five to ten years' time.

Several factors support the case for buying now:

• Repriced values – Purchase prices in many retail locations remain significantly below their long-term historic highs, even as the market stabilises and recovers.
• Falling interest rates – The Bank of England has begun cutting rates and lending conditions are expected to continue easing, reducing the cost of borrowing.
• Negotiating leverage – With transaction volumes subdued, motivated sellers and receivers are willing to engage on price and terms.
• Long-term asset ownership – Owning your trading premises removes the risk of future rent increases and provides a capital asset on your balance sheet.

The right purchase decision depends on your business position, your intended use, and the specific property in question. A professional valuation and thorough due diligence are essential before committing. Our commercial property valuations team can provide an accurate, independent assessment of any retail asset you are considering.

Is now a good time to lease retail space?

For businesses not in a position to buy, or those that prefer the flexibility of a lease, the current market is equally favourable for occupiers. Landlords with vacant retail units are, in many cases, highly motivated to agree terms – and that motivation translates into tangible benefits for incoming tenants.

Conditions you may be able to negotiate in the current market include:

• Rent-free periods – Landlords may offer an initial period at no rent to incentivise occupation.
• Below-market rents – Headline rents remain well below historic levels in many retail locations across the UK.
• Tenant-friendly lease terms – Shorter initial terms, break clauses, and greater flexibility on fit-out are all more achievable than they were when the market was tighter.
• Landlord contributions to refurbishments – In some cases, landlords will contribute to the cost of making a unit fit for purpose.

If you are an established business looking to open a first physical location, expand into a new area, or relocate to a better-positioned unit, the current environment gives you considerably more room to negotiate than a busier market would allow.

Our insight on negotiating lease terms for a commercial property sets out how to approach that process effectively.

What should you be cautious about?

A buyer's or tenant's market is not without risk. Before committing to either a purchase or a lease, it is worth considering the following:

Why is the unit available?

Low footfall, poor accessibility, or an unattractive pitch can be reasons for vacancy that persist regardless of market conditions. A well-priced unit is only good value if the underlying location works for your business.

What are the lease terms?

A low headline rent means little if you are tied into an inflexible long-term commitment with no break clause. Read the full lease carefully and take professional advice before you sign.

What is the condition of the building?

A below-market purchase price can be eroded quickly by remediation costs or deferred maintenance. A building survey before exchange is not optional, it is essential. Our pre-acquisition survey insight explains what this involves and why it matters.

What does the local market look like?

The health of the surrounding retail environment matters. A well-priced unit in a struggling high street requires a clear-eyed assessment of the catchment, the competition, and the direction of travel for that location.

Taking professional advice at the outset, from a commercial agent who knows the local market and a surveyor who can assess the building, will give you a much clearer picture before you commit.

What types of retail property are available?

The UK retail market encompasses a wide range of property types, including high street units, shopping centre spaces, out-of-town retail parks, trade counters, and mixed-use schemes. Each has different occupier profiles, footfall characteristics, and lease structures.

Understanding which format suits your business model, your customers, and your operational requirements is an important part of making the right decision. Our commercial property acquisitions team operates across the country, and can help you select the right building type for your company.

Speak to our retail property specialists

If you want to buy or lease retail space, BTG Eddisons can guide you through the process. Our team has an in-depth understanding of local markets across the UK and can help you identify the right opportunity, negotiate the best terms, and complete the transaction with confidence.

With over 180 years of experience, 35 offices across the UK, and a team of RICS-qualified professionals, we have the expertise and reach to support your next move. Complete the form below or call 0800 051 2593 to arrange a no-obligation consultation with a nearby agent.