I have lived through some of the worst recessions and wholeheartedly believe that the story of 2026 is not one of retreat, but one of refinement.
Deepa Deb is a partner, property, at Edwin Coe
This is a market that has become more selective, more deliberate and ultimately more grown-up in how it allocates capital. That’s not blind confidence – it’s a considered view based on what we’re seeing and what clients are telling us.
Capital has not disappeared. It’s still there, still active and looking for a home. What has changed is that investors are taking longer, interrogating assumptions more closely and backing fewer deals with greater conviction. Volumes have softened, for sure, but intent has not.
The data reflects that shift rather than any kind of collapse. JLL forecasts UK commercial property investment at £43bn to £48bn in 2026, up 15% on 2025. CBRE’s Q1 figures show capital values holding flat, with 1.4% returns driven largely by income. In the living sector alone, £2.5bn was deployed in Q1, a 74% increase year on year. Activity is there – just unevenly distributed and more carefully placed.
We are seeing uncertainty playing out in real time. Pricing remains the sticking point, with buyers and sellers not always aligned on where value should land, and it’s that tension that is slowing decision-making, stretching timelines and creating the sense of a market hesitating.
Investors are prioritising income durability, operational strength and long-term value creation
However, hesitation should not be mistaken for fragility. There is no shortage of capital or liquidity and the foundations remain intact.
Comparisons to 2008 miss the mark completely. This cycle is defined by caution rather than constraint. Debt is available and becoming more competitive and we see that demand remains resilient in sectors with strong underlying fundamentals, such as student accommodation and data centres, supported by structural trends and, in some cases, policy tailwinds. Rather than a market stepping back, it is a market choosing where to lean in. Domestic and international capital continues to deploy, albeit with greater discipline and a bit more slow consideration. The friction sits in sentiment, not in the mechanics of the market.
Calculated move: sectors such as data centres remain resilient
What is emerging instead is a clear two-speed dynamic. Prime, well-located assets with strong ESG credentials continue to attract deep pools of capital and competitive bidding that you’d expect. Secondary stock, particularly where there are questions around performance or future viability, is seeing sharper pricing adjustments and thinner liquidity. The gap between the two is widening and we’re seeing more activity in prime than in secondary assets.
External pressures are shaping behaviour in a way that is hard to ignore. The war in Iran has thrown everything into turmoil, building on geopolitical instability, while knock-on energy costs, inflation and interest rates are, of course, feeding directly into financing conditions and investor outlook. That backdrop is encouraging a more forensic approach to underwriting, with far greater emphasis on detail, resilience and downside protection.
The result is a more disciplined investment landscape. Broad-based optimism has given way to precision. Investors are prioritising income durability, operational strength and long-term value creation. That may mean fewer deals in the short term, but it also points to a healthier, more sustainable market over time. I promise, things really aren’t that bad.
Deepa Deb is a partner, property, at Edwin Coe