With 2025 just around the corner, we sat down with three of our partners Richard Saunders, Chris Grazier and Ian Lambert to hear their key takeaways from the year just gone and predictions for the year ahead in their respective fields. Read on for a digest of their expert insights on the market behaviours, opportunities, challenges, and notable trends affecting the UK . . .
Retail and leisure: hope on the horizon
Our Retail Partner, Richard Saunders, reports that 2024 has been a year of transition and adaptation for the retail sector in the South West, underpinned by the transformation of key retail assets, the return of anchor tenants, and a significant mark shift bringing new challenges.
Significantly, this year he’s seen mixed-use redevelopment projects grow increasingly popular, with retailers showing more confidence despite the economic headwinds they face.
In the year ahead, Richard predicts that this increasing demand for mixed-use development will drive activity in the larger retail voids and counteract vacancy issues. Retail and leisure will also need to align with sustainability initiatives for planning purposes as well as attracting tenants, with green building standards becoming key.
While Bath is expected to maintain a stable path of growth, Bristol’s retail core is poised for significant transformation, which is contingent on the successful execution of large-scale redevelopment projects such as The Galleries and Callowhill Court. Both cities are successfully adapting strategically to meet both the needs of modern consumers as well as the appetite of investors.
2025: The return to the office?
Although Bristol experienced a slowdown in deal activity in 2024, the end of the year looked likely to deliver renewed activity both in and out of the city. If momentum can be carried into the new year, our Office Partner Chris Grazier, feels that the prognosis is positive for the office sector in 2025, and that demand is alive and well with footfall across buildings significantly improving during the Autumn.
While occupiers are increasingly on the hunt for new and best in class refurbished spaces (of which there’s short supply!) there is no doubt in Chris’ mind that confidence is returning to the market. Bristol continues to punch above its weight, both occupier and investment wise and while there are plenty of options available to occupiers, he states that it’s the top quality refurbs and new-build spaces are most in demand. With so little supply in this sector of the market, more investment in the is required to further spur occupier activity and attract the revenue needed to refurbish properties to be best-in–class.
Looking ahead, the development of the Temple Quarter area will see sizeable investment into the Temple Meads area – boosting the quality of transport links and encouraging developers such as APAM / Britannia to bring forward new schemes such as One friary to capitalise on the significant levels of investment. Chris also adds that Life Sciences is an emerging area of growth for Bristol, with the enhanced connectivity proposed between Oxford and Bristol potentially cementing the city as one of the country’s Life Sciences capitals – we’ll be monitoring keenly for developments in the space.
Cautious optimism: what next for the investment landscape
Despite geopolitical insecurity and initial uncertainties surrounding government changes and its first budget, our Investment Partner, Ian Lambert believes that the market is showing signs of momentum, and that 2025 heralds a year of cautious optimism. He notes that the recent interest rate cut has positively influenced market confidence – and a further cut could be the final push to kickstart deal activity, enhance borrowing affordability and stimulate further property investment.
While lower demand and supply than usual has made the past 12-18 months particularly challenging for the real estate market, the general consensus is that things will get better in the year ahead, with investment hotspots like industrial and logistic properties continuing into 2025. Ian agrees with Chris that the office market is showing green shoots of recovery while simultaneously, investment in co-living is on the up. It is expected, though, that the recent tax hikes introduced by the Autumn Budget will inevitably and gradually trickle through the market and make their effects known.
One unique trend Ian has become familiar with – and expects to continue in the year ahead – is cash-rich private family offices becoming increasingly active in the market. Institutional funds no longer fight their corner so assertively, so family offices are able to more easily acquire high-quality assets that were previously hard-won. Whether this is the state of play for 2025 remains to be seen – watch this space for more updates.
