This is according to Sirius Property Finance analysed data on the level of commercial property transactions seen across each region of Britain last year and how the market is forecast to perform in 2023.

The figures show that 2,682 commercial transactions completed in 2022, with London topping the table in terms of the highest level of market activity with 507 transactions, followed by the South East (419) and North West (309).

These three regions are expected to remain UK’s commercial property hotspots in 2023, however, the sector is forecast to see a notable reduction in overall market activity.

Yorkshire and the Humber is expected to see the largest reduction in market activity, with transactions falling by 65%.

London (down 56%), Scotland (down 55%), the South West (down 52%) and East of England (-51%) are also forecast to see total transaction levels fall by more than half.

While total transaction levels are expected to fall, the South East is forecast to sit top of the table in terms of share of total market activity, accounting for 18% of all commercial sales.

London is forecast to benefit from 16% of all commercial transactions, with the North West ranking third at 12%.

Sirius Property Finance head of corporate partnerships Kimberley Gates, comments:

“Commercial market activity is forecast to reduce considerably this year and while this suggests the sector may be in crisis, it’s simply a reflection of the current landscape and the uncertainty that has come due to a flurry of interest rate hikes”.

Gates points out that like the residential sector, commercial buyers are treading with greater caution not just because of the current cost of financing a purchase, but in anticipation that this cost may climb in the short to mid-term.

“While we expect this to dampen enthusiasm for commercial bricks and mortar this year, we don’t anticipate any long-term decline to materialise as the economic picture improves.”