UK commercial property investment softened in Q3 2025, with total volumes hitting £9.8bn, according to research from Carter Jonas.
The research found this was a 2% drop both quarter-on-quarter and year-on-year.
Alternative assets led the way, making up 46% of activity, 14% above the five-year average.
Industrial, office and retail sectors stayed weak, with investment volumes 38%, 52% and 28% below their respective five-year benchmarks.
Industrial investment came in at £2.1bn, down 7% on the quarter.
Office investment dropped sharply to £1.7bn.
Retail volumes fell to £1.5bn, though a few large deals gave some support.
London accounted for 23% of all investment (excluding multi-regional portfolios), down from the five-year average of 35% and the 41% recorded in Q1 2025.
Overseas investors made up 57% of London’s total, mainly favouring offices and alternatives.
Regional markets took 77% of total investment, led by the South East with £970m and East of England with £817m.
Ali Rana, head of national investment at Carter Jonas, said: “Concerns surrounding the forthcoming November Budget are dampening transaction activity.
“Uncertainty over potential tax changes and business rates reform is prompting some investors to delay decisions until policy clarity emerges.
“Nonetheless, stabilising rental performance and improving yield dynamics are providing encouraging signs for 2026.”
Rad Radev, associate researcher at Carter Jonas, said: “With interest rate expectations becoming more predictable and inflation appearing to have peaked, reduced development pipelines are helping to underpin a gradual recovery in investment activity next year, particularly in prime industrial assets and offices suited to refurbishment, repositioning or conversion to alternative uses.”
