As the commercial property market moves into 2026, sentiment across the North East is best described as measured but quietly optimistic.
Following a period of adjustment driven by interest rates, inflationary pressures and changing occupier behaviour, the market is beginning to find its rhythm again.
We sat down with the Newcastle-based commercial team at youngsRPS – Paul Fairlamb, Senior Associate Director and Commercial Chartered Surveyor, Stephanie Dixon, Associate, Commercial Chartered Surveyor, and Chris Pattison, Commercial Surveyor – to gain their insights on what the year ahead may hold.
Paul Fairlamb, Senior Associate Director and Commercial Chartered Surveyor, describes the current mood as quietly positive. “We are seeing a return to sensible decision-making. Pricing has adjusted to reflect current lending conditions and operational costs, which means transactions are progressing with fewer false starts. Confidence is not exuberant, but it is well grounded, particularly where assets are well located and income profiles are strong.”
This sense of realism is proving beneficial across several sectors. Industrial and tradefocused property continues to perform strongly, driven largely by regional occupiers. Chris Pattison, Commercial Surveyor, notes sustained demand for small to mid-sized units. “Local businesses remain active, particularly those linked to construction, logistics and specialist manufacturing. Vacancy levels are relatively low, and that depth of local demand is a key strength of the North East market.”
Town centre property is also evolving. Rather than a return to traditional retail models, interest is focused on mixed-use schemes that support service-based occupiers, leisure uses and flexible commercial space. Fairlamb explains that adaptability is now central to investment decisions. “Investors are looking closely at how buildings can respond to change. Assets that support a range of uses, or can be reconfigured over time, are far more attractive than those reliant on a single occupier type.”
The office sector, while increasingly selective, continues to attract demand where quality is clearly demonstrated. Stephanie Dixon, Associate and Commercial Chartered Surveyor, notes a strong focus on specification and functionality. “Occupiers are being far more deliberate in their decision-making. They want space that genuinely supports their business, whether that is through location, layout efficiency or the overall working environment. Offices that are well-presented, benefit from good natural light and offer modern, usable accommodation continue to let well.”
This shift, she explains, is prompting a more proactive response from landlords. “There is a growing understanding that investment in buildings is essential. Improvements that enhance usability, reduce operational friction and allow occupiers to move in with minimal disruption are key to maintaining rental tone and attracting interest.”
From an investment perspective, activity is beginning to increase as interest rate expectations stabilise. Pattison notes that regional and private investors are particularly active. “There is strong appetite for assets offering steady, long-term income. The North East continues to represent good value when compared with other UK regions, especially for investors taking a longer-term view.”
Looking ahead, the youngsRPS team agrees that flexibility and informed advice will be critical in 2026. Dixon emphasises early engagement. “Whether you are a landlord reviewing an asset or an occupier considering your next move, understanding the market and planning ahead can make a significant difference.”
As the market settles into this next phase, the outlook for Northern commercial property is one of cautious confidence. While challenges remain, 2026 may well prove to be a year of quiet opportunity for those ready to act with clarity and purpose.
www.youngsrps.com