Leading Indicators | Property returns strengthen, investment activity rebounds

Annualised UK All Property returns reach 8.59%, highest level in nearly three years

UK commercial property posted an annualised total return of 8.59% in July 2025, the strongest since September 2022, according to the latest MSCI UK Monthly Index. Industrial was the top-performing sector with a return of 10.52%, followed closely by Retail (10.31%) and Residential (10.03%), all delivering double-digit returns. Hotels (6.18%) and Offices (3.86%) remained weaker, though both have shown signs of stabilisation.

UK CRE core sectors rebound with 14% growth YoY in H1 2025

In the first half of 2025, investment volumes in the UK’s traditional core commercial real estate sectors (Office, Retail, and Industrial) rose by +14% year-on-year. This uptick signals renewed confidence in the resilience of core asset classes, whilst investors continue to prioritise quality and stable income streams.

UK businesses largely insulated from tariffs, though exposure varies by industry

The latest ONS BIC survey shows that most UK businesses do not expect disruption from US tariffs in the coming month. Overall, 74% of firms reported no anticipated impact on their operations. Confidence varies by sector: nearly 95% of real estate companies foresee no disruption, compared with just 60% in manufacturing. This indicates that while the wider UK economy appears largely insulated, exposure remains significant in more trade-dependent industries.