Landlords are taking advantage of lower borrowing costs and improved market performance in key areas such as heavy industry, prompting a rise in commercial property investments.

This is according to the latest research from Shawbrook which reveals a 102% year-on-year increase in the proportion of lending allocated specifically to commercial property purchases from 2023 to 2024.

The increase has been especially marked in the South East, which accounted for 30% of the total commercial purchase lending. The region remains popular with investors due to its strong transport links, steady economic growth, and high demand.

This growth aligns with a trend of property investors diversifying their portfolios. Shawbrook’s data also reveals that semi-commercial applications have also risen, growing from 13% in 2023 to 24% in 2024, indicating a shift towards high-yielding asset classes.

Commenting on the data Shawbrook, director of real estate proposition Daryl Norkett said: “The commercial property market is recovering after a turbulent period, with several sectors showing renewed signs of growth.  Investors are keen to expand and diversify their portfolios with high-yield, high-income properties like commercial, semi-commercial, and HMOs.

He added: “These assets not only offer potentially higher returns, but diversification can also help to build resilient portfolios even in uncertain markets. However, investors should conduct thorough research, as risk profiles can vary significantly across regions and asset types.”