UK real estate 2026: Stability, selectivity and the strategic repositioning
As 2026 unfolds, the UK commercial real estate landscape is defined less by dramatic shifts and more by quiet but meaningful recalibration. For lawyers, investors, developers and occupiers, the market is no longer in crisis mode, but nor is it racing ahead without restraint. Instead, it is becoming a market characterised by stability, selectivity, and strategic repositioning, offering opportunities for those who understand its nuance.
Tenants are more becoming selective than ever
If 2025 taught us anything, it’s that tenants have raised the bar. With limited supply across key sectors, occupiers still have to compete for the right space but they’re no longer willing to take whatever box is available. Their priorities are clearer than ever:
- Prime, well connected locations
- High quality accommodation with strong sustainability credentials
- Energy efficient, future proof buildings
Even high quality buildings can struggle if they’re in the wrong spot, and that divide between prime and secondary locations is becoming more pronounced.
For advisers, this shift is already changing the conversation.
- Landlords face tougher negotiations around energy performance, fit out expectations, and lease flexibility
- Tenants are scrutinising service charges, operational efficiency, and long term running costs with new intensity
Retail: A quiet but meaningful rebound
The retail sector continues to surprise.
Even with a soft economic backdrop, 2025 saw strong performance in shopping centres and food stores, outpacing the wider market. Yet, despite this operational strength, investment activity didn’t keep pace - a reminder that investor confidence reacts more slowly.
In 2026, volumes are expected to rise as more deals come to market, this presents opportunities across:
- Major shopping centre acquisitions and disposals
- Portfolio restructuring
- Lease re-gearing and landlord tenant negotiations
- Strategic repositioning of ageing retail assets
Retail may not be roaring back but it’s regaining relevance, and smart investors (and their advisers) are taking notice.
Service charge and leasing reform: A big year for legal frameworks
Alongside market shifts, 2026 brings important updates to the legal foundations underpinning commercial property. Two developments deserve attention:
a. Updated RICS service charge code
- Effective from the end of 2025, the revised Code sets a new benchmark for how service charges should be managed. Its goal is simple: greater transparency, consistency, and fairness
- It influences everything from how budgets are issued to how end of year accounts are certified and how disputes should be approached
- It doesn’t override lease terms, but it’s fast becoming the reference point for best practice. Landlords and tenants alike will need to adjust their internal processes to stay aligned with expectations
b. Ongoing security of tenure reform under the LTA 1954
- With the Law Commission’s first consultation phase completed, the current contracting out model has been confirmed as fit for purpose, but further modernisation is on the horizon
- While wholesale reform isn’t expected this year, work will continue into 2026, aiming for clearer, more efficient renewal procedures that balance the needs of both parties
Both reforms will affect how leases are drafted, negotiated, and renewed - meaning a more proactive, strategic approach will be essential for clients.
How can our real estate solicitors can help
The UK real estate market may not be booming, but it’s far from stagnant. This is a landscape that rewards:
- Strategic thinking
- Detailed due diligence
- An understanding of evolving occupier expectations
- An eye on regulatory shifts that are quietly reshaping the rules
For those who engage with these dynamics proactively, 2026 offers a fertile landscape for opportunity.
If you have any queries about the contents of this legal article or need any help regarding real estate law, please get in touch with Karkay Lee or another member of our experience real estate team.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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