Exeter Commercial Property Market June 2025

commercial property market exeter

Overview of the Exeter Commercial Property Market from our Agency

Despite challenging market conditions the Exeter commercial property market appears to be showing signs of resilience that differs in comparison with other markets throughout the UK. The whirlwind of international tariffs, tensions in Israel and volatility in UK governance appear to have had a slow impact on our market although the future remains uncertain.

That being said the stock levels of all sectors remain tight and this limited availability is holding prices firm. This and the lack of properties being listed has created a ‘ghost’ market where experience and expertise is vital in providing advice to clients.

Industrial Market in and around Exeter

Industrial demand remains strong due to limited supply especially on Marsh Barton Exeter’s premier trading estate. There is a clear lack of small affordable units with the only availabilities (apart from a few exceptions) being larger 10,000 sq ft plus units with differing degrees of specification.

Rental levels are holding firm and new builds are still commanding premium rates. However some of this space is struggling to sell/let as asking prices remain high and activity and enquiries having stalled.

There is now beginning to be a spill over effect where, due to lack of availability and high prices, towns such as Okehampton, Crediton, Barnstaple and Cullompton have seen an increase in enquiries for commercial space.

New speculative development has been limited due to high construction and financing costs and land prices have remained robust thus having a negative impact on development. Hybrid warehouse/office premises are still being delivered however with Skypark Phase II, Exeter and Mercury Business Park, Cullompton due to complete imminently.

Office Market in Exeter

In the office sector we are experiencing a different picture to that of the industrial market. The sector is still recovering from macroeconomic pressures but 2025 is showing signs of improvement.

Demand is (and has been for a few years now) focused on modern and energy efficient buildings that present well in the marketplace. Older stock is still struggling unless a significant refurbishment has been implemented or there is potential to repurpose the use to residential. Flexible office accommodation having taken a big hit over the last 2 years has started to gain popularity again with a couple of large firms taking space due to limited suitable accommodation available.

Investment in this sector is slow (due to low rent, poor take up among numerous other factors) although buildings priced correctly with strong ESG credentials are starting to gain traction especially in strategic and prime locations.

Retail Market in Exeter

The retail sector although sometimes unfairly nationally marketed as in decline is actually rather robust in some areas of the region. Exeter city centre remains active with a strong mix of national chains and independents. However, like many cities in the UK the city is facing challenges from online retail and changing consumer habits.

Retailers are now required to be innovative to compete and those offering quality products and savvy online marketing campaigns are performing well in the market place. Affordability is key in this market and long gone are the days of large sales accommodation selling on balk due to higher running costs, service charges and inevitably rents (despite reductions).

In the Leisure sector there has finally been some growth in food, beverage and experimental offerings helping footfall in key retail areas of our regions towns and cities.

Outlook

There is positive momentum with falling interest rates on the horizon. Stabilising values are also encouraging both occupiers and investors in the search for market corrected assets especially those with added value asset-management opportunities.

There are some key challenges however and a vital part of these are supply constraints especially in industrial which may limit growth unless addressed through new development.

With the above in mind we expect continued uncertainty in the marketplace although we are finally seeing some positivity returning with key issues finally being dealt with. We are also seeing the return of fully proceedable applicants/buyers that have now realised their business/investment needs over years of compromise and see a corrected real estate market as a good place to park their capital in the short and longer term.

We hope the stability continues and should this be the case we expect a stronger H2 as confidence improves and transactions increase. The South West remains a sought after location to invest in and has clear potential to grow as the economy recovers. Please contact Zach Maiden to discuss your commercial property requirements.

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