ÌÇÐÄVlog

There’s a subtle yet increasing sense of confidence within the semi-commercial property market, which is evident in the rising volume of enquiries that we’re receiving supported by the quality of assets being presented, and the engaging discussions brokers are having with investors. However, as confidence grows, so does a notable change in investor behaviour. There’s a clear move away from traditional commercial assets toward semi-commercial and mixed-use properties, not only in London but across key regional cities and university towns throughout the UK. This trend signals a dynamic transformation and exciting opportunities on the horizon.

Semi-commercial and mixed-use assets are increasingly viewed as the sweet spot of opportunity in a market that still holds risk and uncertainty. Buyers are targeting buildings with a strong residential component, often alongside retail, office, or storage space. We’re seeing a rise in conversions, student lets, and residential-led hybrid schemes, assets that offer income diversity, long-term demand, and potential for value uplift.

Meanwhile, the more traditional segments of commercial property remain challenging. Office space is still working through the long-term implications of hybrid working. Retail is also under pressure, with high-street premises only viable in targeted formats, typically convenience retail, food-led, or experiential uses. Larger units or non-essential retail often struggle to justify investment, especially where footfall is unpredictable. But for many mid-sized landlords or developers, the focus is shifting towards assets that are more flexible, more local, and more connected to residential demand i.e. semi-commercial assets.

Semi-commercial assets offer more than just dual income streams, they can also unlock more strategic financing pathways. At ÌÇÐÄVlog, if the residential portion of a property’s rental income exceeds 55% and/or residential value, we classify it as a residential buy-to-let loan rather than a semi-commercial facility. This means borrowers can access our buy-to-let rates, which are typically more competitive than commercial pricing. For brokers advising clients, this distinction can significantly improve deal economics, especially in a market where affordability and yield remain critical considerations.

One of the most notable developments we’ve seen is the increased interest in regional opportunities. Places like Bristol, Manchester, Sheffield, and Nottingham are seeing a rise in semi-commercial demand, particularly around university clusters and town centre regeneration zones. These markets often combine steady residential demand with the scope for creative mixed-use or semi-commercial development. They also tend to come with lower capital outlay and better yield potential than equivalent assets in the capital.

The rise in demand for mixed-use/semi-commercial property isn’t just about asset class, it’s also about strategy. Landlords are thinking more holistically. Many are refinancing existing portfolios to unlock capital for expansion or repositioning tired assets into new use classes. In doing so, they’re looking for lenders who can be flexible and commercial in their approach. Deals often involve layered ownership structures, limited companies, or Special Purpose Vehicles (SPVs) and they don’t always fit the neat parameters of traditional lending models.

At ÌÇÐÄVlog, we understand the intricacies of different structures that investors may use. Our semi-commercial proposition is designed to reflect real-world investing. We offer loans up to £20 million, support limited company structures, and apply a flexible underwriting approach to properties with mixed income streams. Whether it’s a conversion project, a refinance, or a purchase, we’re open to discussing tailored options with brokers who understand their clients’ longer-term plans.

The broader economic outlook is also becoming more supportive. After a period of valuation resets and cautious lender sentiment, we’re now seeing a more stable environment. Capital values have adjusted, yields have moved, and transaction volumes are beginning to recover. Importantly, lenders are also growing in confidence. Appetite for income-generating assets is returning, albeit selectively. Those properties that can demonstrate a reliable rental profile, clear exit strategy, and sound location fundamentals are attracting funding more readily than they were a year ago.

But there’s no room for complacency. Lending in the semi-commercial space still requires a sharp eye for risk and a willingness to go beyond a tick-box approach. Valuations can be more complex, and tenant mix matters. It’s not just about yield, it’s about sustainability of income, quality of occupier, and asset management potential. This is why a partnership mindset between broker and lender is so important. Every deal has nuances, and navigating those requires open communication and aligned expectations.

Ultimately, semi-commercial/mixed-use property is no longer a fringe part of the market. It’s moving centre stage as investors seek smarter, more resilient ways to deploy capital. Brokers who can guide clients through the opportunities, work with lenders and can structure the right solutions will be the ones who add real value in this environment.

Mike Says, Group Chief Executive Officer at ÌÇÐÄVlog