Falling values push older commercial stock to make tough decisions

Latest government data has confirmed what valuers and lenders have been signalling for months: refinancing pressure is now translating into formal distress across commercial property, and the assets feeling it most are the ones that were already hardest to let.

The Insolvency Service recorded 235 administrations in March 2026, 82% higher than a year earlier, with the spike driven by more than 100 connected real estate companies entering administration in a single month. Separate analysis puts real estate insolvencies up 58% on the first quarter of 2025, attributed to a refinancing shock layered on top of higher interest rates and falling asset values. Construction sits alongside it as one of the most distressed sectors of all.

What the figures state

Headline insolvency totals are easy to misread, and the Insolvency Service has been careful to flag the March cluster as potentially a one-off rather than a step change. The more durable signal sits underneath. Capital has not left the market – UK commercial investment reached £11.2bn in the year to date – but it has become markedly more selective, concentrating on prime, well-let, energy-efficient assets.

Why older stock is on trial

The assets coming under refinancing pressure are disproportionately older, less efficient and more capital-hungry. A building that cannot meet tightening energy standards, or that needs significant works to remain lettable, is precisely the asset a lender is least willing to fund, and an investor is least willing to buy.

The decision-makers

For owners and lenders holding this kind of stock, it is imperative to act and act now. Broadly, there are three routes:

• Reposition the asset through targeted refurbishment and decarbonisation works to bring it back into lettable, financeable condition.
• Hold and manage the building whilst its options narrow, accepting a weaker exit.
• Dispose, often through a receiver or administrator sale, and minimise the loss.

A building survey is what separates the first option from the second. Understanding the true cost of bringing an asset up to standard – fabric, services, energy performance and regulatory compliance – is the difference between an informed repositioning decision and an expensive guess.

What next?

The next months will show whether the March administrations were a cluster or a leading edge, and whether tightening energy standards accelerates the quality of the properties. Either way, the buildings caught in the middle will need an honest assessment before any decision can be made.

If you would like to discuss building surveys, refurbishment and decarbonisation works, or any of our service lines, complete the form below and a member of the BTG Eddisons team will be in touch.