"The data reflects a changing landscape for developers where demographic trends and economic challenges are shaping demand across different types of commercial property"
- Terry Woodley - Shawbrook
A growing number of property developers are identifying retirement living as a major opportunity for commercial growth, with new research from Shawbrook revealing that 66% expect the market to improve over the next 12 months.
Of those optimistic developers, 19% expect significant improvement, while 47% forecast slight growth. This renewed confidence follows a broadly positive year in 2024, when 64% believed the commercial property market had already improved, 11% significantly and 53% slightly.
Looking ahead, retirement living is seen as the most profitable sector, according to 42% of developers surveyed. Other areas expected to drive commercial growth include:
Hospitality and leisure (37%)
Retail units in towns, cities, and high streets (32%)
Student accommodation (31%)
Semi-commercial units (30%)
Out-of-town retail (23%)
Warehousing (22%)
Hospitals (19%)
“The data reflects a changing landscape for developers where demographic trends and economic challenges are shaping demand across different types of commercial property," explained managing director of development finance at Shawbrook, Terry Woodley. "As developers seek stable returns and long-term value, the retirement living sector stands out as a key focus area, aligning with the UK's aging population and evolving housing needs. Developers will also have a key part to play in helping the Government achieve its lofty housebuilding targets, which require a collective, multi-pronged approach to provide adequate housing for different generations and demographics."
"Despite economic headwinds last year which have carried through to 2025, developers have proven themselves to be agile and resilient, with the majority being able to grow their businesses. This trend looks set to continue in the second half of this year, as many diversify their projects and build robust income streams.”
Dasos Kirksides, head of healthcare at Shawbrook, added, “The retirement living sector has proven remarkably resilient in recent years, which have been marked by economic headwinds, numerous regulatory changes and volatility in the wider markets. As we look forward to the rest of 2025, the signs are really positive,"
"With the economy growing and the most recent interest rate cut easing the cost of debt for operators, the sector is well set for growth. As part of the Government’s housebuilding plans, flexible and innovative solutions are needed to provide adequate retirement living options, which presents an excellent opportunity for property developers.”
