With commercial property investment growing in the final quarter of 2024 by 28% year-on-year, the investment hotspots have been revealed.
According to Alan Boswell Group, investment levels saw the biggest rise since mid-2021.
This boom followed a second consecutive bank rate reduction which led investors to investigate where to invest.
Now the insurance firm’s experts have 31 cities to find the best investment opportunities.
Commercial property is recovering
The firm’s Wendy Burgess said: “The UK’s commercial property market is undergoing a complex recovery, with investor interest growing in certain regions, while challenges persist in others.
“The surge in demand seen in Q4 2024 suggests a cautious optimism, yet it’s clear that the outlook varies significantly by location.
“Cities like Leicester and Bristol benefit from strong retail sales and appreciating property values, while cities such as Cardiff and Birmingham face significant hurdles, including high business closures and stagnant property value growth.”
Commercial property ownership
The property experts looked at factors including business survival, crime statistics, retail strength, flood vulnerability, tax relief on vacant spaces and property value per square metre.
Their findings point to Leicester as the leading location for commercial property ownership in 2025.
The city has a standout score of 7.06 out of 10, buoyed by robust retail sales matching 100.3% of pre-pandemic figures from 2019.
It also enjoys a low business closure rate, modest property value growth of 3.79% over five years and minimal crime, recording just 6 shoplifting incidents and roughly 1 burglary per 1,000 businesses.
Business closure rate
Alan Boswell Group puts Bristol in second place, scoring 7/10, thanks to a business closure rate of 118 per 1,000 enterprises and one of the lowest flood risks nationwide.
Despite 9 shoplifting cases per 1,000 businesses, its property values edged up by 2.86% over half a decade.
Derby secures third position with a 6.99/10 rating, boosted by retail sales at 102% of 2019 levels and a low burglary rate of 1 per 1,000 businesses.
However, its vacant space relief of £193,291 per 1,000 businesses trails Leicester’s £261,469.
Commercial property success
At the opposite end, Cardiff stumbles as the toughest city for commercial property success, scoring just 2.72/10.
Plagued by 152 business closures per 1,000 enterprises and the highest flood risk in the UK, it also suffers from a 1.86% drop in property value over five years and 10 shoplifting cases per 1,000 businesses.
Birmingham fares little better at 2.78/10, grappling with 158 closures per 1,000 businesses, retail sales at 89.5% of 2019 levels, and no property value increase.
Bradford completes the bottom trio with a 3.34/10 score, marked by 144 business closures per 1,000 enterprises and elevated crime, including nine shoplifting incidents and two burglaries per 1,000 businesses.
London, meanwhile, claims the dubious honour of the highest commercial crime rate, with 48 shoplifting incidents per 1,000 businesses, trailed by Nottingham at 13.
However, Blackpool excels in retail sales, hitting 137.8% of 2019 levels, with Liverpool close behind at 122.3%.