Just nine local authority districts across England and Wales exceeded £1bn of commercial real estate sales in 2023, a sharp drop from 25 the previous year and 24 in 2019.- Since 2017, the total value of commercial transactions has halved ( -49%), from £104bn to just £53bn in 2023, whilst the volume of transactions has similarly reduced by more than a third (-34%).
- Only eight districts saw a year-on-year increase in commercial transaction values overall.
- Growth trajectory continues to be curbed by debt, interest rates, and limited investment returns, says property data provider, Search Acumen.
Challenging conditions in the commercial real estate market have contributed to a collapse in the number of local authority districts in England and Wales attracting £1bn+ in annual commercial real estate sales, according to new analysis from Search Acumen, the property data provider.
Just nine areas of England and Wales saw more than £1bn of commercial real estate sales during 2023, according to analysis of official data from HM Land Registry (HMLR).
This is the first time the number of £1bn+ local commercial real estate markets has dropped into single figures since comparable records began in 2017.
In contrast, 25 local authorities clocked up £1bn+ of commercial property sales in 2022, with a similar number (24) achieving this milestone in both 2018, and in 2019 (21); the final year before the pandemic [Table1].
Table 1: The number of local authority districts across England and Wales exceeding £1bn of commercial sales
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| No. of £1bn+ districts | 20 | 24 | 21 | 17 | 28 | 25 | 9 |
Source: Search Acumen analysis of HM Land Registry data
Cycle low
Search Acumen’s analysis shows the total value and volume of all commercial real estate sales in England and Wales has been on a steady decline since 2021, with last year’s figures showing the full extent of the cycle low.
Since reaching a high of £104bn in 2017, the annual value of commercial transactions has halved (-49%) to just £53bn in 2023, while the volume of transactions has similarly reduced by over a third (-34%) [Graph 1].
Source: Search Acumen analysis of HM Land Registry data
Commercial winners and losers
Search Acumen’s Billion Pound Commercial Real Estate Hotspots study shows which areas have been holding out against the market downturn. The top three billion-pound spending districts in 2023 were Greater London at £14.6bn, Greater Manchester at £2.2bn, and the West Midlands at £1.8bn [Table 2].
Table 2: The nine billion-pound-plus spenders by local authority district in 2023
| Local Authority District | Total value of commercial transactions in 2023 above £1bln |
| GREATER LONDON | £14,642,494,629 |
| GREATER MANCHESTER | £2,153,096,439 |
| WEST MIDLANDS | £1,761,645,783 |
| KENT | £1,669,479,955 |
| WEST YORKSHIRE | £1,458,560,760 |
| SURREY | £1,447,647,685 |
| ESSEX | £1,048,817,529 |
| CITY OF NOTTINGHAM | £1,048,595,020 |
| HAMPSHIRE | £1,017,398,734 |
Source: Search Acumen analysis of HM Land Registry data
*(see Table 5 in notes to editors for volume comparison by district)
Only eight local authority districts across England and Wales saw a year-on-year increase in the total value of commercial values (7%), with the City of Nottingham topping the list at 117% jump compared to 2022 [Table 3]. Other cities appear to do well, including Brighton (63%), while Bridgend tops the charts for Wales (55%).
Table 3: The eight local authority districts in 2023 that saw a year-on-year increase in commercial transaction values
| Local Authority District | Year-on-year change (2023) in commercial transaction values that saw an increase |
| CITY OF NOTTINGHAM | 117% |
| WESTMORLAND & FURNESS | 89% |
| BRIGHTON AND HOVE | 63% |
| BRIDGEND | 55% |
| CITY OF BRISTOL | 5% |
| HEREFORDSHIRE | 5% |
| LEICESTER | 3% |
| WEST BERKSHIRE | 3% |
Source: Search Acumen analysis of HM Land Registry data
Of the 10 towns that saw the value of commercial real estate transactions increase by more than 50% year-on-year in 2023, the seaside town of Whitley Bay in the North Tyneside borough took the top spot at 146% [Table 4]. Interestingly, the volume of deals in Whitley Bay dropped year-on-year by 52%, suggesting the value of land remains key to these regional deals.
Only eight towns saw an uplift year-on-year in commercial real estate transactions volumes, in which Farnborough came out on top with a 38% increase in deals.
Table 4: Top towns in 2023 that saw a year-on-year increase in commercial transaction volumes
| Town | Year-on-year change (2023) in volume of commercial transactions |
| WHITLEY BAY | 146% |
| HAILSHAM | 127% |
| FARNBOROUGH | 125% |
| BRIGHTON | 97% |
| WASHINGTON | 75% |
| OLDHAM | 62% |
| BICESTER | 57% |
| DEWSBURY | 57% |
| NOTTINGHAM | 55% |
| REDDITCH | 52% |
Source: Search Acumen analysis of HM Land Registry data
Whilst many of the UK’s metropoles continue to play an important role in maintaining commercial real estate traffic, periphery districts are taking the hit. 30 of the 118 local authority districts across England and Wales saw a decline of 50% or more in the value of commercial deals in 2023 when compared with the previous year, including 24 (80%) outside the South East. The three biggest areas to see a decline in value year-on-year were Cumbria (-93%), Rutland (-92%) and Central Bedfordshire (-88%).
Market Commentary
Andrew Lloyd, Manging Director of Search Acumen, comments: “Our analysis points to a persistently flat picture for commercial property growth since 2021. Debt, interest rates, and investment returns and opportunities continue to bite commercial markets, leaving some investors hesitant to commit until they are confident in a healthier forecast ahead.
“Whilst these figures are disappointing for the economy, the real estate industry is adept at navigating periods of uncertainty, often using these times to strategise and capitalise on emerging opportunities. We know there are some pockets of investment thriving, focusing on the fundamental strengths of prime assets and emerging opportunities in sectors such as technology and life sciences. This selective approach to investment underscores the importance of detailed, reliable property data in informing strategic decisions. For those of us in the property data and search sector, this reinforces the need to continue innovating to provide fast and effective tools that enable transactions to happen swiftly and confidently in a sensitive market.
“For transaction volumes in particular, it is also important to view this development in the context of wider industry delays. Over the past two years, we’ve witnessed a dramatic reduction in the number of conveyancing companies, creating a bottleneck among those that remain. This consolidation may now be stabilising, allowing the surviving firms to adapt and potentially expand their capacities to meet the growing demand, something which may be more reflective in HMLR figures later in the year.
“Looking ahead, whilst the election’s outcome will undoubtedly have a substantial impact on broader economic policies that could either stimulate or stifle property market activity, the wheel of fortune also lies in the hands of the Bank of England as the industry waits with bated breath for interest rates to reduce. If this happens, by the end of 2024 we may well see an injection of energy into the sector and more billion-pound districts emerge.
“Until then, it will be vital for a new Government to bolster the amount of money flowing into the UK commercial property sector if it is to successfully oversee a continuation in economic growth. Policy and industry must work together to enable the sector to bounce back from its cycle low.”
