Commercial property sectors are becoming more attractive to investors
After the pressure of high interest rates and speculative mechanisms, the commercial property sectors are showing positive momentum. Analysts state the market has every chance of returning to its previous level of activity. The year 2025 will be a significant period for many sectors in terms of investment returns.
Commercial property is becoming an attractive investment again after a long period of stagnation. The reasons for this increase in activity are:
– job growth;
– stable consumption;
– falling unemployment rates.
Marcus & Millichap’s Hessam Naji says the commercial property market is experiencing its best results in years. Restrictions on new construction in certain segments are helping to maintain a balance between supply and demand.
Commercial property market trends
The least stable sector is office property. SMBC reports that prices for these properties have fallen by 41% compared to 2020. Meanwhile, rents stabilised in 2025 compared to the same period in 2024, and vacancy rates declined.
According to analysts, lower interest rates should increase activity in the office sector. This factor also has a positive effect on larger types of commercial property. Low interest rates reduce refinancing risks and stimulate capital inflows into the industry.
Survey results suggest that market participants are optimistic and expect to make a profit from investing in commercial property. At the same time, the greatest demand is for data centres and retail premises. Experts expect rental rates for these facilities to increase. Naji says demand for retail space is growing rapidly, driven by consumers returning to physical stores. Brands used to focus solely on online sales, but now, many are opening physical retail outlets. As a result, demand for retail leasing has reached its highest level in 20 years.
These changes are creating new opportunities for investment through Real Estate Investment Trusts (REITs). In current market conditions, such investments promise high returns. For example, REITs must pay out at least 90% of their taxable income in dividends, making them a more attractive income vehicle than traditional savings accounts.
Analysts recommend that investors focus on the following areas:
– cold storage facilities;
– industrial premises;
– retail properties.
Bank of America notes an increase in commercial property yields. In addition, the share of real estate companies in the S&P index has doubled. This also points to a positive outlook for the sector.
Among REITs, government funds are the most stable. They maintain high asset values and have greater access to capital.