The Leasing Market:
Slower, Sharper, and Shifting
Last month we talked about the sales market being tighter than we’ve ever seen. This month, it’s the leasing side that’s showing its own unusual patterns – and they’re just as interesting, but for very different reasons.
Right now, there’s plenty of stock available, but tenants are taking their time. Deals are slower to finalise, incentives are getting heavier, and every clause in a lease is being reviewed in finer detail than we’ve seen in years.
What’s Driving It
In short – caution.
Over the past few years, we’ve seen a flood of new, near-identical industrial units hit the market:
1 £ 100-300m² footprint
2 £ Small office and mezzanine
3 £ Modern finishes, electric roller door, and a tidy façade
They’ve been the backbone of the industrial leasing market for years… until now. In some pockets, there’s simply too many of them, and enquiry has slowed.
Meanwhile:
Ground floor offices without strong street exposure are quiet.
Upper-level tenancies without lift access have all but stalled.
Retail is also softening, in line with broader economic trends.
The Tenant Mindset
Tenants are now much more tactical:
They’re checking every lease clause, from incentives to outgoings to make-good.
They’re negotiating on security – pushing back on directors’ guarantees and preferring cash bonds or bank guarantees.
They’re mindful of risk, as insolvencies and liquidator stories have crept back into the collective memory.
Across our asset portfolio, we’re also seeing:
A steady rise in arrears
More Notice to Remedy Breach actions
Increased reporting of ATO debt defaults and supplier delinquencies
It’s a cautious market – not broken, but much more defensive than what we’ve known for the past decade.
What It Means for Owners
For commercial property owners, this means two things:
-Presentation and flexibility matter more than ever.
With more comparable stock on the market, small differences – a fresh coat of paint, a tidier façade, easier access – can be the deciding factor.
-The right tenant will take longer to land.
That’s not a reflection on your asset; it’s simply where the market is right now. Deals are happening, but they’re happening slower, and tenants are doing more homework.
We’re now less than two months from Christmas, and typically that means the market starts to wind down – except in the years when it finishes strong.
This year, it’s doing the opposite. It’s the first time in a decade we’ve entered the end-of-year stretch with more quiet than momentum.
Until Next Time
Adam Leishman
The Principal Licensee / Director
Looking Ahead
We expect a subdued close to 2025, with leasing activity likely to pick up again once business confidence resets in the new year.
When that happens, owners who are well-positioned and ready to move will be the first to benefit.
