Commercial property investment remained above £10bn for the fourth consecutive quarter in Q3 2026, according to the latest data from Carter Jonas.
This was 5% lower than in Q2 2026, but 3% higher than the same period last year. The rolling annual investment total edged up from £48.8bn in Q2 to £49bn, 7% higher than a year earlier and its highest level since Q1 2023. Activity remains below the 10-year average, but the figures suggest a gradual recovery in investment volumes.
London accounted for approximately 33% of UK investment activity in Q3 – excluding multi-regional portfolio transactions – down from 35% in the previous quarter. Overseas investors accounted for 75% of capital invested in London during the quarter, a significant increase on the 46% recorded in Q2.
Outside London, the South East recorded the highest level of investment, with approximately £508m of acquisitions, followed by the East of England at approximately £455m.
Industrial investment rose by 48% quarter-on-quarter in Q3 to £2.8bn, bringing volumes to within 6% of the five-year quarterly average. Retail investment increased by 51% to just under £1.6bn. Office investment totalled approximately £2.3bn, down 9% on the previous quarter but 34% higher than a year earlier.
Alternative assets, including build-to-rent, student accommodation and later living property, remained the largest sector by investment volume at approximately £3.4bn, despite activity falling by 43% quarter-on-quarter.
Ali Rana, head of national investment at Carter Jonas, said: “Four consecutive quarters of investment above £10bn indicate a greater degree of stability in the market. Capital is available and investors are willing to transact, although buyers remain highly selective and there is little urgency to deploy it at current pricing. The market is adapting to new pricing realities, but investors remain cautious. Deals are taking longer to complete, with buyers placing greater scrutiny on asset quality, income security and the risks associated with individual transactions.
“Prime assets have generally proved more resilient, while secondary stock, particularly where significant capital expenditure or occupational risks are involved, requires a clearer risk premium to attract investment. Asset quality, income security and opportunities for rental growth or active management are increasingly important to investment decisions.”
Rad Radev, associate research analyst at Carter Jonas, added: “Higher borrowing costs continue to weigh on debt-funded buyers, while cash investors benchmark property returns against comparatively attractive bond yields. This is reinforcing the divide between assets that attract investor interest and those requiring more significant repricing.
“The latest figures are encouraging, particularly the rebound in industrial and retail investment. However, the recovery remains uneven, with capital concentrated on assets offering secure income or clear opportunities for value creation. Greater economic and fiscal clarity and lower financing costs will be needed to restore confidence and unlock more activity. For now, the recovery looks delayed rather than derailed.”
