U.K. retail property has firmly re-established itself as a core real estate investment sector, with Knight Frank research showing it has outperformed all traditional property classes in 2025 and is forecast to deliver total returns of approximately 9.5 percent in 2026, as improving occupational fundamentals and stabilizing pricing drive renewed investor confidence.
2025 marked a pivotal year with structural change within retail now largely complete. Online penetration has flatlined at around 28 percent, and retailers are now actively reallocating capital back into their physical estates, reinforcing the symbiotic relationship between online and bricks-and-mortar retail rather than competition between the two channels.
Total retail investment volumes are forecast to reach £5.83 billion ($7.85 billion) in 2025, down 17 percent year-on-year and 8 percent below the 10-year average, with the shortfall largely driven by a lack of available stock rather than weakening demand
