The PIA is delighted to relaunch our Property Data Report, which provides facts and figures about the UK commercial property industry. The most recent report covers the year to end 2022.

Property, and specifically commercial property, provides the physical base from which most economic and social activity takes place – where people work, shop and enjoy leisure activities. It comprises offices, shops, cafes, restaurants, cinemas, gyms, hotels, warehouses and industrial buildings, petrol stations, car parks and other commercial buildings.

Read the Property Data Report 2023

Key Findings

Amongst its detailed statistics, the Property Data Report 2023 report shows:

• Over half of commercial property – which represents the business infrastructure of the economy – is rented, allowing firms to focus their capital on their core business rather than their premises.
  
• Traditional 15-25 year leases with upward only rent reviews that placed repairing and insuring obligations on the tenant no longer dominate the commercial property market. Reflecting a preference amongst many occupiers for flexibility, most leases are for five years or less, and many longer leases contain early break rights.
  
• Rents account for a relatively low proportion of business costs, particularly for office occupiers.
  
• Rents have fallen relative to inflation and have increased at a slower rate than business rates.
  
• Investors own approximately £500bn worth of commercial property, with overseas investors accounting for over 30% of this property exposure. This amounts to around 7% of the total assets of UK insurance companies and pension funds.
  
• Commercial real estate debt is provided by a much more diverse range of lender types, and at more modest loan to value levels, compared to the years leading up to the Global Financial Crisis. UK banks and building societies accounted
  for only 36% of total loans outstanding in 2022, half the pre-GFC market share.
  
• Over the longer term, commercial property tends to deliver investment returns that are higher than UK Government bonds but lower than equities.
  
• Taxes paid by the commercial property industry are over £18bn with a further £26bn in business rates in 2022.
  
• The commercial property industry contributed approximately £74bn to the UK economy in 2022.
  
• There are over 1.1m people employed by the commercial property industry.
  
• While carbon efficiency and broader sustainability considerations are increasingly a focus for institutional owners, managers and occupiers, the wider commercial
  property market has a lot of work to do if commercial property carbon emissions are to hit net zero milestones (they need to fall by around 5% p.a.).
  
• The ‘living’ sector, which includes build-to-rent (BtR) residential as well as specialist segments like purpose-built student accommodation (PBSA), has emerged as an important part of the property investment market in recent years.