Where confidence takes a hit, short-sighted decisions are likely to follow. It’s important when this happens that we take a long-term view and consider the bigger picture.

To illustrate: according to RICS, the UK commercial market showed signs of slowing in Q4 2024.

Only 33% of its survey respondents felt conditions were shifting into an upturn, down from 44% in the prior survey. Meanwhile, across the occupier market, tenant demand was stagnant.

Troubling yes, but there is no need to panic. Take a step back, and it’s clear to see that the commercial property market still has plenty going for it.

By size alone, the UK’s commercial market is second only to Germany’s in Europe. By the looks of things, it may only be a matter of time until we take the top spot.

While tenant demand may have been subdued in Q4, investment demand jumped 28% across all commercial sectors, according to Rightmove’s quarterly commercial insights tracker.

Moreover, CBRE recorded a total return of 1.1% in December UK for commercial property.

Looking ahead, our prospects seem promising too.

The last quarter of 2024 may simply have been a blip in the immediate aftermath of the Autumn Budget as this year is already off to a good start.

Inflationary pressures are coming down enough to allow the Bank of England to cut the base rate.

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Hopefully, this will increase confidence going forward. Indeed, CBRE and Savills expect the commercial property market to rebound over the coming months.

Tenant demand, one area of the market that appears to be struggling at the moment, is also set to ramp up.

Much of the lack of demand for commercial space in recent years has been the result (among other things) of flexible working.

If fewer people need to head into the office, why invest in them at all?

But this trend could be reversing. Both the state and private sector want to get workers back in action in a major way.

The Government has its “Get Britain Working” plan, which aims to get us to an 80% employment rate.

Also KPMG’s 2024 CEO Outlook survey found that CEOs are hardening their stance on returning to pre-pandemic ways of working. The vast majority (83%) expect a full return to the office within the next few years.

Slowly but surely, workers are set to dust off their leather shoes, iron their shirts, and really get back to work. For many, it’s bound to be a welcome change from endless zoom calls in tracksuit bottoms!

And where more people head to the office, they’re likely to search for pubs, restaurants, and other leisure options nearby.

There is still much work to be done, of course.

The commercial property market needs to find the right balance in a post-pandemic economy. But where property investors find that a commercial investment might just be what their portfolio needs, the specialist lending market will be there to wade through the uncertainties.