Over the past year, industrial leasing enquiries across the UK jumped by roughly 11%, while office demand grew by just 2% and retail actually fell by 4%. Those figures, from Rightmove’s Q4 2025 Commercial Insights Tracker, tell you something important: the market for commercial space is splitting apart, and the type of property you choose matters more now than it has in years. I’ve been watching these trends for a while, and what I keep seeing is that businesses that rush into a lease without understanding the sector dynamics end up stuck in space that’s hard to adapt, hard to sublet, and hard to exit.
The problem is that most people searching for a commercial lease start in the wrong place. They look at rent first, then location, then maybe the length of the term. But the data shows that the real differentiator — the thing that determines whether a lease becomes an asset or a liability — is the quality and category of the space itself. A cheap secondary office with a poor EPC rating might save you money upfront, but it’s also the kind of property that’s getting harder to let, harder to finance, and harder to insure. Here’s what you actually need to know.
What a commercial lease actually commits you to
Most people assume a commercial lease is just a rental agreement with a longer term. It’s not. When you sign a commercial lease in the UK, you’re taking on repairing obligations, service charges, and often a personal guarantee that ties your personal finances to the property. The key term here is full repairing and insuring (FRI) — and it’s one of the most misunderstood parts of the process.
If you’re looking at a secondary office with an older heating system and a poor EPC rating, an FRI lease could become a financial trap. The full breakdown of commercial lease types is worth reading before you sign anything. What I’d do in your position is ask the landlord for a schedule of condition — a detailed photographic record of the property’s state at move-in. That document becomes your defence when the landlord tries to claim you caused pre-existing damage.
Why the quality of your space matters more than the rent
Here’s where the research gets really practical. According to Savills’ February 2026 Market in Minutes report, prime yields in nine out of 14 commercial sub-sectors are now under downward pressure. That’s up from just three sub-sectors at the end of 2025. What that means for you is that landlords of prime properties are becoming more willing to negotiate on terms — but only for the best spaces. Secondary and tertiary offices, particularly older stock with poor EPC ratings, are getting left behind.
Consider this scenario: you’re a small business looking for 1,000 square feet of office space. You find two options at similar rents. One is a modern, energy-efficient building in a prime location with flexible layouts. The other is an older building with a low EPC rating in a secondary location. The older building might seem like the sensible choice — same rent, more space. But the data from Rightmove shows that secondary offices are becoming harder to let, and that trend is accelerating. If your business grows and you need to sublet or assign the lease, you’ll struggle. If you need to exit early, you’ll pay a penalty. The cheaper option often ends up costing more.
What I notice is that businesses often underestimate how much the energy efficiency of a building affects their running costs. A poor EPC rating means higher energy bills, potential difficulty getting a mortgage or insurance, and a harder time selling the lease later. The practical tips for finding commercial space I’ve put together cover this in more detail, but the short version is: don’t let a low headline rent blind you to the long-term costs.
Where businesses get tripped up when choosing a lease
I’ve seen the same patterns repeat. Businesses focus on the wrong things, miss the hidden costs, and end up locked into leases that don’t work for them. Here are the most common mistakes, backed by what the data actually shows.
Ignoring the sector trends before choosing a property type
The biggest mistake is picking a sector without understanding where demand is heading. Rightmove’s data shows industrial leasing enquiries up 11% year-on-year, while retail leasing fell 4%. If you’re opening a retail unit on a high street that’s already losing footfall, you’re swimming against the tide. The East Midlands saw the largest increase in overall investment demand at +43% year-on-year, followed by London at +39% and the East of England at +36%. Those are the regions where landlords are most motivated to deal. If you’re flexible on location, you can negotiate better terms.
Overlooking the EPC rating and its consequences
From April 2023, it became unlawful to let a commercial property in England and Wales with an EPC rating below E. But the real issue is that properties with ratings of D or below are becoming increasingly difficult to finance and insure. The Colliers UK Property Snapshot for May 2026 highlights that investor sentiment is shifting toward energy-efficient assets. If you take a lease on a low-rated property, you’re taking on a liability that will only get harder to manage as regulations tighten. A tenant landlord lawyer can review the EPC and advise on whether the landlord has any obligation to improve it before you move in.
Underestimating the cost of service charges and maintenance
In a multi-let building, the service charge covers things like cleaning, lighting, security, and maintenance of common areas. But those charges can vary wildly, and they’re not always capped. I’ve seen service charges add 30% or more to the effective rent. The guide to maintenance charges explains what to look for, but the key is to ask for a service charge budget for the previous three years and compare it to the current year’s estimate. If the charges are rising faster than inflation, that’s a red flag.
Signing a personal guarantee without understanding the risk
Many commercial landlords in the UK require a personal guarantee from the director of the tenant company. That means if the business can’t pay the rent, the landlord can come after your personal assets — your house, your savings, your car. The Savills data shows that investment activity in Q4 2025 reached £20 billion, the highest Q4 since 2021. That’s good news for the market, but it also means landlords are in a stronger position to demand guarantees. If you’re asked to sign one, negotiate a cap on the guarantee — for example, limiting it to six months’ rent rather than the full term. A property lawyer can help you structure this.
→ Scroll right to see all columns
| Sector | Leasing Demand Change | Investment Demand Change |
|---|---|---|
| Industrial | +11% | +12% |
| Offices | +2% | +4% |
| Leisure | +1% | -7% |
| Retail | -4% | +3% |
How to find and secure the right commercial lease
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The process of finding a commercial lease isn’t complicated, but it requires a methodical approach. Here’s the sequence I’d follow if I were doing it today.
Start with the sector and location data, not the listings
Before you even look at a property, understand the market conditions for your sector and region. The Rightmove data shows that industrial demand is strong across the board, but office demand is highly location-dependent. Prime London locations outside the City and Westminster — places like Camden, Hammersmith and Fulham, and Kensington and Chelsea — saw double-digit leasing demand growth. Meanwhile, City of London office leasing fell 24%. If you’re an office-based business, you want to be in a location where demand is growing, not shrinking. That gives you more options if you need to move or sublet later.
Get professional advice before you negotiate
Commercial leases are legally complex documents. The terms around rent review, break clauses, repairing obligations, and service charges can have significant financial consequences. I’d recommend engaging a commercial property solicitor or a business lawyer who specialises in lease negotiations. They can review the draft lease, identify unfavourable clauses, and negotiate amendments on your behalf. The cost of professional advice is small compared to the cost of a bad lease.
Negotiate the key terms before you commit
Most lease terms are negotiable, even if the landlord says they’re not. The things to focus on are the rent-free period (typically 3–6 months for a new lease), the break clause (you want one at year 3 or 5), and the cap on service charge increases. The Savills data shows that prime yields are under downward pressure in nine sub-sectors, which means landlords are more willing to deal. Use that leverage. If the property has been on the market for more than three months, the landlord is likely motivated.
Inspect the property thoroughly and document everything
Before you sign, commission a building survey and an EPC assessment. Check for issues like damp, asbestos, outdated electrical systems, and poor insulation. A carbon monoxide alarm is a sensible addition to any commercial space, especially if the property has gas heating. Take dated photographs of every room, every wall, and every fixture. That schedule of condition I mentioned earlier is your best defence against disputed dilapidations claims at the end of the lease.
Frequently asked questions about commercial leases
Can I negotiate the rent in a commercial lease? ▾
What happens if I need to leave before the lease ends? ▾
What is a rent review and how does it work? ▾
Do I need a solicitor to review a commercial lease? ▾
What is a dilapidations claim? ▾
How long does it take to secure a commercial lease? ▾
Your next move
The commercial property market is shifting. Industrial space is thriving, prime offices are holding their value, and secondary retail is under pressure. The businesses that do well are the ones that choose their space based on data, not just instinct. Start by looking at the sector trends for your region, get professional advice before you negotiate, and document everything at move-in. If this was useful, you might also want to read UK office space: location, location, deception — spotting the hidden pitfalls.
Sources and Further Reading
Renting commercial space near tube stations — A practical guide to choosing locations with strong transport links and understanding how proximity affects rent and footfall.
Rightmove Commercial Property Insights 2026. Rightmove, January 2026.
Colliers UK Property Snapshot – May 2026. Colliers, May 2026.
Market in Minutes: UK Commercial Investment. Savills, February 2026.
