86% of investors expressing a positive outlook, only slightly below last year’s 88%. Optimism is strongest among property companies (89%) and investment managers (91%), while funds (71%) and private equity investors (50%) remain more cautious.

Market sentiment in 2025 was dampened by weak economic growth and uncertainty ahead of the November Budget, which temporarily slowed activity. With greater policy clarity now emerging and interest rates expected to ease, confidence is building that market momentum will improve heading into 2026.

Nick Peet, divisional managing director, real estate finance of Santander, said: “2026 promises opportunity in UK commercial real estate.

“Resilient market fundamentals, adjusted rents and lease structures, along with clearer tenant trends, position skilled operators to capitalise on pent-up demand and increased transaction activity in the year ahead.”

Philip Eves, investment director of Buccleuch Property, added: “2026 presents opportunities for exceptional returns. With strong advice and careful selection, assets in industrial and retail sectors can continue to benefit from rental growth.

“Having completed several sales this year, we are well-positioned to pursue high-demand, high-potential opportunities next year.”

Sectors to watch

The research showed that investor sentiment on sector performance for 2026 highlights a continued preference for defensive income and structurally supported growth. Retail warehousing (27%) and living (25%) are viewed as the top-performing sectors, broadly in line with last year’s rankings. Industrial remains a core allocation for many investors at 23%, with both offices (14%) and high street retail (11%) seeing a clear resurgence in investor favour.

Howard Crawshaw, managing director of Knight Property Group, said: “I can see offices making a comeback as more businesses return full-time, with quality space remaining at a premium. Industrial sheds will continue to be in demand due to limited new supply and retail warehousing is also set to remain popular.”

Factors to create a more liquid market in 2026

Investors identified confidence (28%), followed by stabilising debt terms (27%) and improving macro-economic conditions (24%) as the top three drivers for a more liquid market in 2026. This highlights how sentiment, financing and the broader economic backdrop work together to support transaction activity.

Ewan Stewart Transactions Manager, DTZ Investors, said: “Less geo-political uncertainty and a cut to interest rates would be welcome. I also expect competitive pricing for core product, with pooled pension funds holding capital to deploy and all targeting similar stock.”

Colin Finlayson, director at Lismore, concluded: “Our view for 2026 is more positive. Central belt logistics, prime retail and retail warehousing will continue to be in demand but we see appetite for offices growing, particularly where capex requirements are not demanding.

“In terms of buyers, private investors and family offices are expected to remain active, providing liquidity, while fund activity grows cautiously. French SCPIs will continue targeting secure, longer-income assets, sustaining demand across key sectors.”