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"Let’s start with the good news first – the retail sector grew last year. The value of retail sales went up 1.4% to £517 billion, and the number of transactions increased by 0.7%. They might not sound impressive, but, after two years of decline, it’s great to see the downward trend halted.
And 2025 has started off in similar fashion, with the ONS announcing that sales volumes in the first three months grew by 1.7% when compared to the same months in 2024. But the overall outlook remains optimistically cautious as we wait to see the economic effects of National Insurance rises, export tariffs and inflation on consumers and retailers.
The number of sales made online grew again in 2024. So, we’re expecting to see the continued increase in quality logistic and distribution hubs popping up around the country in strategic locations.
I’m also happy to see how many have thought about investing in a semi-commercial property (94%) as it’s a sound way to offset risks and generate multiple incomes from one property. At Together, we expect to see a rise in these mixed commercial and residential rental properties in 2025.
The role of the high street may be changing but there’s definitely cause for optimism. I think that many SME retailers are going to need support from specialist lenders if they want to achieve their property and business ambitions this year. Commercial mortgages and loans need to be fast and flexible to adapt to our customers’ changing business needs and circumstances.”
- Chris Baguley, Managing Director, Corporate, Together
Retail street takes with Kazy
How are people shopping in 2025? In Cities in Focus 2025: Street Takes with Kazy, we hit the streets of Birmingham to hear real opinions on the stats shaping the UK’s retail market — all in under 60 seconds.
Factors influencing retail property investment.
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On the high street.
In the last 12 months, what occupancy have you noticed increasing the most along the high street, if anything?
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City insights
- 203,500 people (16%) employed in the wholesale, retail, hotel and restaurant sector (Autumn 2024)
- Manchester city centre ranked top retail and leisure location in UK (Colliers)
- 35% average expected increase in retail revenue over the next five years
- 76% thought retail shops would be a good investment over the next five years
- 79% thought semi-commercial properties would be a good investment over the next five years
In 2024, Manchester city centre had a footfall of over 37.5 million visitors, presenting numerous retail opportunities for both chain retailers and independent shops. The area surrounding the Arndale Centre continues to be Manchester’s major retail hub, employing more than 13,500 people and housing 1,200 retail businesses.
In January 2025, the Greater Manchester Business Board announced a new visitor economy plan, setting out ambitious plans to boost tourism to the region and add an extra £15bn to the local economy.
Commercial property professionals in Manchester pointed to the impact of e-commerce (37%) and the shift to experiential and service led retail (23%) as the most important factors when making retail property investments.
The return of the traditional ‘Town Centre’ in Manchester
In recent years, our town centres and high streets have been in decline, decimated by the pandemic and changing buying habits as customers embraced online shopping as well as more competition for disposable income from the leisure and hospitality industry. It’s a trend marked by more empty shop fronts, the loss of high street favourite brands including W H Smith, and a rise in out of town retail and online shopping.
But many towns in Greater Manchester are fighting back with ambitious plans to attract customers by reinventing retail, refurbishing properties, improving open spaces, and mixing in more leisure, hospitality and residential options. Key examples include:
Nationally, local councils have gained new powers to help combat the growing number of empty shops on their high streets. Under the High Street Rental Auctions legislation, councils will be able to auction off leases on long-term vacant properties in a bid to boost local economies and job markets, as well as supporting small and medium-sized enterprise (SME) businesses.
If you’re setting up shop or branching out, our commercial mortgages could help you secure the perfect premises to grow your business.
City insights
- 100,000 sq ft of retail floorspace under construction in 2024
- 53% increase in West Midlands logistics property take-up
- 34% reported an increase in beauty and grooming salons on Birmingham’s high streets
- 32% average expected increase in retail revenue over the next five years
- 70% confident that retail investment would be a good opportunity over the next five years
The retail sector currently makes up 21% of all businesses in Birmingham, making it the largest single sector by number and a significant contributor to the regional economy.
City centre shopping continues to be dominated by the Bullring (32.7m annual footfall) and Grand Central Shopping Centre (14.3m annual footfall). 40% of commercial property professionals in the city said that consumer demand and footfall were the most important factors influencing their investment decisions in the sector.
46% of Birmingham-based commercial property professionals said that in the last 12 months, they’d seen more tenants asking for rolling contracts rather than fixed contracts. This is much lower than the national average of 63%.
Demand for distribution hubs in Birmingham
As online retail sales throughout the UK continue to grow (recording £127bn in transactions in 2024), we’re seeing an increase in the need and number of logistics & distribution hubs springing up in key strategic locations to meet the unique challenges.
These large, high-tech warehouses store millions of pounds worth of product and need to be able to dispatch to customers over a wide geographical area, often within very tight deadlines.
The West Midlands is ideally positioned to cater for these needs, as it occupies a central location in the UK and has easy access to major transport links such as the M6, M5 and M40 motorways, and rail and air freight hubs. In 2024, the West Midlands saw a 53% increase in the amount of logistics space leased in comparison to 2023, covering an estimated 5.4 million sq ft.
Developers that we’ve worked with have also taken advantage of the copious brownfield sites that line Birmingham’s major motorways as they can be cheaper to build on (due to existing infrastructure) and provide easy access to the road network.
Here’s how developers transformed a West Midlands brownfield site into a large logistics hub with a £22m development facility from Together.
City insights
- £150 million to be generated by 2026 Commonwealth Games
- 523,000 sq ft largest retail park in Scotland (Glasgow Fort)
- 80% confident that retail investment would be a good opportunity over the next five years
- More chain restaurants and cafes opening on the high streets in the last 12 months. Chains – 28%, Independents – 22%
- 30% stated that ease of planning regulations and development opportunities played the most significant part in their commercial investment decisions
In 2024, Glasgow City Council unveiled wide ranging plans to transform the city centre. The plans will concentrate on improving the look and feel of key streets in the area, enhancing the shopping experience and creating fresh opportunities for retailers.
One such project, starting in early 2025, centres around the “Golden Z” of Sauchiehall Street, Argyle Street and Buchanan Street. As well as retail, it will include cultural attractions, open public spaces and a thriving hospitality scene.
It’s a similar ‘mixed-use’ strategy we’ve seen in other big city redevelopment schemes throughout the UK, integrating residential, retail, office, and leisure and hospitality properties in the same area to encourage people to visit, stay and spend in the city centre.
On an individual brand-level, this has also led to the rise in ‘experiential’ shopping, where the in-store journey isn’t just transactional but immersive, interactive and engaging as well, fostering brand loyalty and advocacy. 28% of our survey respondents in Glasgow said that the shift to experiential retail was an important factor influencing their retail property investment decisions.
Semi-commercial opportunities in Glasgow
Did you know that, in Glasgow, there are approximately 52 enquiries for every available residential rental property? That’s a staggering 33 more than the UK average.
It highlights not only the housing crisis in Scotland at the moment, but an opportunity for commercial business investors purchase retail properties with residential space attached (or unused space that can be converted into residential space) and generate a dual income.
With the Commonwealth Games coming to the city in 2026, and a growing tourism industry in general, landlords could look at the higher rental yield potential of short term lets. Or the properties could be ideal accommodation for the city’s growing student population.
98% of commercial landlords in Glasgow told us that they had considered investing in a semi-commercial property, with 42% saying that they already have one in their portfolio. However, 14% said that they weren’t confident on securing the funding needed.
If you’re looking to buy a mixed-use property for residential and commercial purposes and generate a dual income, our semi-commercial mortgages are on hand to help.
Buy to Let | Offices | Manchester | Birmingham | Glasgow | About Us
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