Are landlords moving investment from residential to commercial? – London Wallet

Specialist bank Shawbrook has seen some significant increases in investment by professional landlords into the commercial sector, specifically office space, indicating less reliance on revenue from residential property.

Its latest figures showing a 44% rise in applications for office-related projects in the first half of 2025.

The growth in some parts of the UK has been extraordinary. The South West has seen a rise of 233%, The West Midlands close behind at +225% and London and Wales sharing third place with 100%. These are followed by Yorkshire and the Humber with an 83% increase, and a boost of 50% in the South East rose 50%. However, it’s not entirely the same picture across the country – East Anglia has seen a 60% decline, while the East Midlands fell by 20% and Scotland is down by 14%.

Daryl Norkett, director of real estate proposition at Shawbrook, believes diversification has been the prevailing strategy for professional landlords and they adapt to challenges in the market and the economy as a whole.

He said: “With Covid firmly in the rear-view mirror, businesses are adjusting to the new normal, which for many includes a return to office working – as evidenced by a 100% increase in applications for London office projects.”

“As economic turbulence looks set to be on the cards for the foreseeable future, professional landlords should be looking to take advantage of increasing demand across different asset classes to maximise their yield and protect their business.”