West Midlands’ commercial property sales showed an extraordinary surge in 2024. Latest auction data reveals a 13.9% increase in total funds raised to £5.5 billion. The number of lots sold reached 28,063, which represents a 10.6% rise from the previous year. These numbers demonstrate the region’s property market strength.
Freehold commercial property demand remains high, especially in mixed-use and tenanted properties. The market’s average sale prices jumped from £190,315 to £195,969, which shows growing investor confidence in West Midlands’ commercial properties. Online auction platforms have made property investment available to more buyers and helped accelerate this upward trend.
West Midlands Auctioneers Report Record-Breaking Commercial Sales
Property auctions in the West Midlands have broken all previous records. Leading auctioneers report exceptional sales figures throughout 2024. The commercial property market has showed remarkable resilience with robust growth in transaction volumes and prices.
Birmingham guides with 22% price growth
Birmingham’s commercial property market stands out as the region’s top performer. Prime rental growth has reached 22% since the end of 2019 [1]. This upward trend makes the city a prime spot for commercial buyers looking at long-term capital appreciation.
Office space in Birmingham has caught buyers’ attention, with 2024 take-up reaching 846,321 sq ft across 97 transactions [1]. These numbers are 20% higher than 2023 [1] and 22% above the five-year annual average [1]. Birmingham has now achieved its highest annual take-up in seven years.
The prime headline rent is £42.50 per sq ft [1], and experts predict another 22% growth over the next five years [1]. This growth would push prime office rents to about £52.00 per sq ft by 2029 [1]. Freehold commercial property for sale West Midlands becomes an increasingly attractive investment option.
Regional property auctioneers see unprecedented buyer interest
Regional auction houses report outstanding performance figures. Bond Wolfe recorded record revenues of £210 million for 2022, a 20% jump from the previous year [2]. Their auction sales reached £150 million [2], with an impressive 88% success rate after selling 972 lots from 1,100 offered [2].
Auction popularity continues to soar across the sector:
- Properties sold at auctions grew by 11.3% from 2021/2022 to 2022/2023 [3]
- Auction revenue hit £409.3 million in 2022, up 30% from 2013 [3]
- A remarkable annual growth of 62.9% between 2021 and 2022 [3]
Mixed-use developments and tenanted commercial properties have performed exceptionally well at auction. Secured income streams draw both seasoned investors and newcomers to the commercial property sector.
The digital rise of the auction process has helped fuel this growth. Bond Wolfe has become “the UK’s number one livestreamed auctioneer” [2]. This shift to digital has opened doors for investors beyond the West Midlands region.
Q3 2024 set new records with take-up reaching 337,236 sq ft across 23 transactions, a 156% increase from 2023 [4]. Birmingham had already logged 71 office transactions by this time – the highest for that period since 2015 [4].
Commercial investment property for sale West Midlands keeps drawing strong interest. Regional property auctioneers say buyer demand remains strong as we move through 2025.
Economic Factors Drive Investors to Freehold Commercial Property
Economic factors have created ideal conditions for investors to buy freehold commercial property in the West Midlands. The regional market now presents a perfect mix of opportunities.
Post-pandemic recovery accelerates market activity
The West Midlands market has bounced back strongly after the pandemic. Central Birmingham recorded its highest annual transaction figures since 2017 in 2024 [5]. Market activity gained momentum steadily. Transactions reached 5.4 million sq ft across 24 deals in 2024—a substantial 53% increase from the previous year [6].
Mid-box industrial market queries have jumped by about 30% since late 2022 [7]. Manufacturing companies led the occupier activity and made up over 44% of total transactions [6]. Online retailers (20%), third-party logistics companies (16%), and wholesalers (11%) also contributed to this diverse market activity [6].
Interest rate stabilisation encourages buyer confidence
Interest rates have started to stabilise after a period of uncertainty. This marks an important development for commercial property investors. Economic forecasts point to three interest rate cuts in 2025 [8]. These cuts will “alleviate pressures on indebted businesses and households” and reduce financing costs for those looking to boost investment [8].
This market change brings relief from previous conditions, as credit had become harder to obtain in late 2024 [9]. All the same, recent data reveals “a surge in demand for commercial property investment compared to the same period last year, driven by falling interest rates” [10].
Local business expansion creates demand for commercial spaces
Birmingham and the Black Country face a severe shortage of industrial units [11]. Yet local businesses continue to expand and need more commercial space. Companies want their staff back in physical offices [5]. The education sector has also substantially increased transaction numbers [5].
Businesses are eager “to build and expand for the future” [5]. They particularly want high-quality manufacturing, logistics, and distribution spaces [7]. This growing business environment makes freehold commercial property for sale West Midlands an attractive investment option as we head into 2025.
Tenanted Commercial Properties Outperform Vacant Lots
Tenanted commercial properties stand out as top performers in recent West Midlands auctions. They consistently fetch higher prices than their vacant counterparts. The guaranteed rental income appeals strongly to buyers in today’s cautious market.
Secure income streams attract risk-averse investors
Most investors stay cautious these days. They look for prime, well-secured assets that show strong property fundamentals [1]. Union’s purchase of 55 Colmore Row at £105m with a 4.85% yield serves as a perfect example [1]. This pattern aligns with investor priorities since commercial property creates steady income streams while tenant businesses remain profitable [12].
A West Midlands industrial investment site proves this appeal perfectly. The fully rented 42,129 sq ft portfolio contains multiple units with reliable tenants and generates £228,000 in rental income [4]. These properties include rent reviews that let buyers boost returns at specific dates [4]. The Midlands market offers great opportunities, thanks to affordable property prices and strong rental demand that drive high yields [13].
Retail units with established tenants achieve premium prices
Retail units with long-term tenants keep getting premium prices at auction [14]. This sector has grown remarkably, with West Midlands retail property investment reaching over £800 million in 2024 [15]. The numbers tell a compelling story:
- Investment jumped from £254 million in 2023 to £803 million in 2024—a massive 216% increase [15]
- Retail made up over 44% of total transactions in the region [15]
- British Land’s purchase of two retail parks added £220 million to this total [15]
Regional property auctioneers confirm that tenanted commercial properties sell for higher prices than vacant ones. They often advise sellers that “if you are hoping to sell your property to another landlord or you are paying any mortgage/finance on the property, it is usually better to leave a tenant in situ and sell it as a tenanted investment” [16].
Mixed-Use Developments Emerge as Auction Favourites
Mixed-use developments have become the star performers at West Midlands auctions. These properties now lead the investment category and show better price growth than traditional single-use commercial spaces. Local auctioneers say buyers are drawn to these versatile assets in today’s economic environment.
Residential-commercial combinations fetch highest price increases
Mixed-use properties keep setting new price records at auctions across the region. A three-storey corner building in Brierley Hill showcases this trend. The property combines three retail units with eleven self-contained apartments. It reached a guide price of £690,000+ and offers potential yearly rental income of £78,738 [3]. The yield beats comparable single-use properties hands down.
Worcester tells a similar success story. A property with ground floor retail and upgraded multiple-occupancy rooms above hit a guide price of £325,000+. The estimated yearly rental value stands at £38,500 [3]. Freehold commercial properties with mixed-use setups continue to command top prices throughout the West Midlands.
Investors capitalise on diversified income potential
These properties shine because they create multiple income streams. Take this Dudley property that brings in £37,500 yearly. Its income could double to about £75,000 per year once the upper floor development completes [17]. Having two income sources makes the investment much safer.
Investors’ attention is drawn to:
- Revenue flowing from different but complementary uses [18]
- Better overall returns through multiple tenants [18]
- Lower risks because tenants are diverse [19]
- More reliable long-term income than single-use properties [20]
Urban regeneration projects fuel mixed-use demand
Urban renewal programmes keep driving interest in mixed-use developments higher. Homes England research shows housing-led regeneration creates positive ripple effects that boost nearby property values [21].
These renewal projects deliver real economic wins. The British Property Federation’s detailed study of major mixed-use developments in Birmingham proves this point. Their research highlights how these projects boost tax revenue, household income, business rates and create jobs [2]. The developments attract both local and international businesses while creating vibrant communities where people can live, work and play [19].
Conclusion
The West Midlands commercial property auctions show impressive market strength in 2024. Birmingham leads with a remarkable 22% price growth, which proves the region’s strong commercial sector. Mixed-use developments have become top performers, and residential-commercial combinations now fetch premium prices that attract investors of all types.
Stable interest rates and local business growth create perfect conditions for property investment. Bond Wolfe’s record-breaking £210 million revenue shows how regional auction houses meet increasing buyer interest. These numbers reflect growing investor confidence in West Midlands commercial properties.
Properties with long-term retail tenants perform well as investors move toward reliable income streams. Mixed-use developments remain strong because they give investors multiple revenue sources and help revitalise urban areas.
The market’s current strength comes from solid economic foundations and higher transaction volumes. This makes the West Midlands an excellent choice for commercial property investment. The region’s growth shows no signs of slowing down, with positive trends expected through 2025 and beyond.
References
[1] – https://www.savills.je/research_articles/262231/308430-0
[2] – https://centaur.reading.ac.uk/35650/
[3] – https://www.bondwolfe.com/bond-wolfe-seeing-increasing-demand-for-commercial-and-mixed-use-property-lots-at-auction/
[4] – https://www.galaxyrealestate.co.uk/property/10697/
[5] – https://www.greaterbirminghamchambers.com/resource/surge-in-office-leasing-expected-to-drive-birmingham-s-property-demand.html
[6] – https://www.savills.co.uk/research_articles/229130/371308-0
[7] – https://www.savills.co.uk/blog/article/374073/commercial-property/west-midlands-mid-box-industrial-market-gains-momentum.aspx
[8] – https://www.insidermedia.com/news/all/west-midlands-commercial-property-retail-investment-surges-to-more-than-800m-innes-england
[9] – https://www.rics.org/content/dam/ricsglobal/documents/market-surveys/global-commercial-property-monitors/Q4-2024-RICS-UK-Commercial-Property-Monitor.pdf
[10] – https://jacobs-steel.co.uk/how-interest-rates-are-affecting-commercial-property-investment-in-the-uk/
[11] – https://www.siddalljones.com/news/lack-of-industrial-space-is-now-a-serious-threat-to-west-midlands-economic-recovery/
[12] – https://hastings.moderngov.co.uk/documents/s21713/Land and Property Commercial Property Investment Strategy.pdf
[13] – https://businessinthemidlands.co.uk/8-reasons-to-property-invest-in-the-midlands/
[14] – https://www.rightmove.co.uk/commercial-property-for-sale/West-Midlands-County.html
[15] – https://www.linkedin.com/pulse/west-midlands-retail-property-investment-exceeds-800m-jens-winton-hrvje
[16] – https://www.auctionhouse.co.uk/guide/sell-tenanted-property
[17] – https://www.bondwolfe.com/auctions/properties/256096-property-auction-dudley/
[18] – https://thecommercialpropertyexperts.co.uk/listings/commercial_sale-RX566321-rugby
[19] – https://shepcom.com/commercial-retail-property-in-birmingham-an-ultimate-guide/
[20] – https://www.sdlauctions.co.uk/latest-news/guide-to-investing-in-mixed-use-property/
[21] – https://www.gov.uk/government/publications/measuring-the-placemaking-impacts-of-housing-led-regeneration/measuring-the-placemaking-impacts-of-housing-led-regeneration-accessible-version