Quick answer
UK commercial property values fell 0.9% in the third quarter of 2026, according to the CBRE UK Monthly Index published on 8 October. Rents rose 0.5%, giving a total return of 0.5%. Retail was the strongest sector, with a total return of 1.8% and values up 0.2%. Office values fell 1.1%, driven by Outer London and regional offices, while Central London office values were flat. Industrial values fell 0.9%. CBRE put the fall down to higher government bond yields and borrowing costs over the previous two months. For buyers, lower values can mean better entry prices, but valuations and loan sizes need to reflect today's yields.
What the Q3 index shows
CBRE's press release on the Q3 index sets out the quarter:
- All property: capital values down 0.9%, rental values up 0.5%, total return 0.5%.
- Retail: total return 1.8%, capital values up 0.2%, rents up 0.5%. Retail warehouse rents rose 0.8%.
- Offices: capital values down 1.1%, driven by Outer London and M25 offices and the rest of the UK. Central London office values were flat. Office rents rose 0.7%.
- Industrial: capital values down 0.9% as yields moved out, with rents up 0.4%.
Steven Devaney, senior director of research at CBRE, said "UK commercial real estate faced a more challenging quarter, with capital values falling as yields moved outwards", and that "increases in government bond yields and borrowing costs over the last two months have impacted real estate performance". The Intermediary also reported the figures.
Why values fell while rents rose
A commercial property's value is roughly its rent divided by its yield. When yields rise, because investors can earn more elsewhere or borrowing costs more, values fall even if rents hold up. That is what happened over the summer. Bank Rate was held at 3.75% in September, as covered in our Bank Rate report, but market rates rose. TAB's latest monitor noted two-year swap rates went above 4.7% in September, as covered in our semi-commercial lending report.
Rising rents are the better news. Across all property, rents grew in the quarter, with offices and retail warehouses leading. A property with a secure tenant and rising rent is in a stronger position than the headline value change suggests.
What it means for commercial bridging
Bridging lenders lend against the value on the day, so a valuer's view of the yield matters as much as the rent. When you buy or refinance:
- Expect conservative valuations on secondary offices and empty units. Lenders often lend less against vacant commercial property.
- Leases matter. The length of the lease, the strength of the tenant and any break clauses all feed into the valuation.
- Plan the exit at today's rates. Most commercial bridges are repaid by a commercial mortgage. Lenders test the rent against the repayments, so a higher rate means a smaller term loan. Our guide to how commercial mortgage rates are set explains why.
Commercial bridging funds purchases that need to move quickly, such as at auction, and properties that need work or new tenants before a term lender will take them. For offices, see office bridging loans. If your business will occupy the building, see business premises bridging.
Opportunities in a softer market
Falling values can open doors. Regional offices that have lost value may suit a change of use to homes, which may be possible under permitted development. See commercial to residential finance and our guide to permitted development. If you are building commercial space, commercial development finance covers industrial and other schemes, and a pre-let can strengthen the case.
Before you buy, read our guides to buying commercial property and commercial mortgage deposits. We search the market, with access to 300+ lenders, and Instant Quotes shows which commercial bridging lenders on our panel fit your deal.
Common questions
Are UK commercial property values falling?
Slightly. CBRE's index showed a 0.9% fall in capital values in Q3 2026, while rents rose 0.5%. Retail values rose, and offices and industrial fell.
Why did commercial property values fall in Q3 2026?
Yields moved out as government bond yields and borrowing costs rose over the summer, according to CBRE. Higher yields mean lower values for the same rent.
Can I get a bridging loan on an empty commercial property?
Yes, some lenders fund vacant commercial property, usually at a lower loan to value than for a let building, with a plan to let and refinance or sell.
What repays a commercial bridging loan?
Usually a commercial mortgage once the property is let or improved, or a sale. Lenders want to see a realistic exit before they lend.
This article reports news and published figures as at 14 October 2026. It is for general information only and is not legal, tax or financial advice. Bridge & Build Finance is a commercial finance brokerage service, not a lender. Finance is subject to status, lender criteria, valuation, underwriting and approval.
