Demand for retail property investment in the UK rose by 30% in the third quarter of the year, according to Rightmove.
At the same time, supply of retail property dropped by 2%.
Demand for high-street retail investment was up by 45% year on year, though this was down from 56% in the previous quarter.
The figures follow a series of cuts to the Bank of England’s base rate.
Office market recovery also continued, with demand to invest in office space up by 31% compared to last year and demand to lease office space up by 7%.
Key London markets such as Westminster, the City of London and Hackney saw strong growth in leasing demand.
The industrial sector led the way, with demand to lease industrial space up by 29% and investment demand up by 53% compared to the same period last year.
Rightmove’s data showed overall commercial property investment demand was up 11% year on year in Q3.
The previous quarter saw a 20% rise.
Andy Miles, managing director of commercial real estate at Rightmove, said: “Bank Rate cuts are supporting investment in the retail sector, and the commercial property sector more broadly compared with last year.
“The retail sector is also being helped by more realism over values, and an improving occupational market.
“However, like all aspects of the commercial property market, there are some segments and sectors of the market doing better than others.”
Miles added: “High-street retail is showing some positive figures overall, but some high streets and shopping centres in secondary locations will be moving more slowly.”
Steve Rodell, managing director – retail & leisure at Christie & Co, said: “Despite broader economic uncertainty and reports of declining consumer spending, trade remains steady across needs-driven retail sectors such as convenience stores and petrol stations.
“These essential services continue to attract strong investor interest.
“While discretionary spending and luxury retail may feel the pinch if consumers tighten their belts, the overall retail property market remains resilient and we’re seeing high demand for quality assets in desirable locations.”
Michael Sears, Propertymark advisory panel member for NAEA Commercial, said: “It’s encouraging to see sustained momentum in retail property investment, particularly in the high-street sector, as interest rate cuts begin to filter through the economy.
“The annual uplift in retail investment demand highlights growing confidence, especially as investors seek value in a market where pricing has become more realistic.
“However, despite strong headline figures, regional disparities remain.”
Sears added: “The broader recovery in commercial property investment, from offices to industrial, is also welcome, particularly the resilience of the industrial sector and signs of returning strength in key office markets.
“These trends support the view that confidence is gradually returning across commercial real estate, driven by improved financing conditions and occupier demand.
“As ever, commercial agents and property professionals play a vital role in helping investors and landlords navigate evolving market conditions and ensure that confidence is matched by long-term sustainability.”
