Outlook 2O26
Mark Gower Commercial Managing Partner
“As in 2025, the key to success will lie in stock selection, and on focussing on strong fundamentals”
We hope 2026 will offer steady progress within the ‘new normal’ that markets find themselves in, with confidence and optimism maintained through the gradual reduction of interest rates, coupled with banks easing the credit taps and taking on more risk, making borrowing more affordable and accessible.
In turn we believe this will bring more stability to commercial markets through increased deal volumes, and potentially a steady improvement in sale prices through yield compression. A scenario that could well be enhanced if the FTSE 100 is unable to continue its remarkable growth story, or the cracks appearing in the AI story get bigger. One thing is for sure, the money ultimately must go somewhere.
With economic growth expected to remain slow and inflation persistent under the current Government, few commentators believe interest rates have much further to fall. Income is therefore likely to play an increasingly important role in investors overall returns in 2026, with index-linked leases or leases that contain fixed rental increases continuing to attract strong demand. We think rental growth on the other hand will remain the preserve of prime properties, as the rents and values of secondary and tertiary properties are more susceptible to the headwinds of high occupational costs, cautious consumer spending and forthcoming changes to Minimum Energy Efficiency Standards. As in 2025, the key to success will lie in stock selection, and on focussing on strong fundamentals.
Mark Gower Commercial Managing Partner
We hope 2026 will offer steady progress within the ‘new normal’ that markets find themselves in, with confidence and optimism maintained through the gradual reduction of interest rates, coupled with banks easing the credit taps and taking on more risk, making borrowing more affordable and accessible.
In turn we believe this will bring more stability to commercial markets through increased deal volumes, and potentially a steady improvement in sale prices through yield compression. A scenario that could well be enhanced if the FTSE 100 is unable to continue its remarkable growth story, or the cracks appearing in the AI story get bigger. One thing is for sure, the money ultimately must go somewhere.
With economic growth expected to remain slow and inflation persistent under the current Government, few commentators believe interest rates have much further to fall. Income is therefore likely to play an increasingly important role in investors overall returns in 2026, with index-linked leases or leases that contain fixed rental increases continuing to attract strong demand. We think rental growth on the other hand will remain the preserve of prime properties, as the rents and values of secondary and tertiary properties are more susceptible to the headwinds of high occupational costs, cautious consumer spending and forthcoming changes to Minimum Energy Efficiency Standards. As in 2025, the key to success will lie in stock selection, and on focussing on strong fundamentals.
“As in 2025, the key to success will lie in stock selection, and on focussing on strong fundamentals”
As market confidence improves, we may see a modest increase in the number of distressed sellers in 2026, but on the whole, we would expect private investors / property companies and corporates to continue to be the primary source of supply.
In terms of demand, throughout 2025 we consistently saw high levels of experienced cash buyers (i.e. those who know us and had bought before), with on average 8 out of every 10 saying they’d like to buy again. Moreover, 70% of the lots we sold at our 8 auctions benefitted from competitive bidding, with the average overage achieved above reserve being in excess of 11%. It is hard to see these numbers materially changing over the course of the next 12 months, due to reasons previously mentioned.
In summary with the budget behind us we are optimistic for the prospects of 2026, and excited by the challenge of a new year. Of course, no one knows for sure what will happen, and heightened levels of uncertainty have been a bit of a theme in recent years. But there is often opportunity found in uncertainty.
Whether you intend to buy or sell this year, we believe our experienced market leading team is particularly well placed to help you see the opportunities and identify the threats, thanks to our long-standing and exclusive focus on commercial property.
We wish you a very happy, healthy and prosperous New Year.
As market confidence improves, we may see a modest increase in the number of distressed sellers in 2026, but on the whole, we would expect private investors / property companies and corporates to continue to be the primary source of supply.
In terms of demand, throughout 2025 we consistently saw high levels of experienced cash buyers (i.e. those who know us and had bought before), with on average 8 out of every 10 saying they’d like to buy again. Moreover, 70% of the lots we sold at our 8 auctions benefitted from competitive bidding, with the average overage achieved above reserve being in excess of 11%. It is hard to see these numbers materially changing over the course of the next 12 months, due to reasons previously mentioned.
In summary with the budget behind us we are optimistic for the prospects of 2026, and excited by the challenge of a new year. Of course, no one knows for sure what will happen, and heightened levels of uncertainty have been a bit of a theme in recent years. But there is often opportunity found in uncertainty.
Whether you intend to buy or sell this year, we believe our experienced market leading team is particularly well placed to help you see the opportunities and identify the threats, thanks to our long-standing and exclusive focus on commercial property.
We wish you a very happy, healthy and prosperous New Year.