Investment demand in hospitality and leisure space remains low

Sirius analysed current demand across the commercial property sector by measuring the number of commercial assets currently available on the market that have already been sold subject to contract, as a proportion of all available investment opportunities.

The highest level of commercial buyer demand is currently attributed to development sites, while demand for office space remains healthy at 30.3% across England.

Kimberley Gates, head of corporate partnerships at Sirius Property Finance, commented: “We’re seeing the dominance of online retail having a significant impact on commercial property, boosting warehouse demand and suffocating physical retail demand.

“In contrast, the aftermath of Covid and the ongoing cost of living crisis is continuing to impact appetites for leisure and hospitality space and it remains the least in demand sub sector within the commercial space.

“But there is an undeniable ebb and flow to commercial property demand which means those sectors that are currently struggling could find their fortunes turning in the near future. For example, as and when the cost of living issue is brought under control, restaurants and bars will become more affordable and attract more customers which will, in turn, lead to an increased demand for hospitality and leisure units that have fallen out of favour since the early days of the pandemic.

“Furthermore, high demand for development sites shows that developers are confident about the future, and that current woes will improve before too long.”