Why Data Centres and Alternative Commercial Properties Are Delivering Strong Capital Value Growth in 2025

14 days ago

The Rise of Alternative Property Investment in the UK

As the UK commercial property landscape continues to evolve, investors are shifting focus from traditional offices to alternative property types offering stronger returns and greater resilience. In 2025, data centres, life sciences labs, cold storage, and media studios are among the fastest-growing sectors in terms of capital value and rental yields.

This trend reflects long-term changes in how we live, work, shop, and stream—powered by digital infrastructure, e-commerce, and the life sciences boom.

 

Data Centres: Powering Capital Growth

With the rapid expansion of AI, cloud computing, and digital services, demand for secure, high-capacity data centres has increased with London, the South East, and Manchester leading development.

These facilities offer:

  • Long-term leases with major tech tenants
  • High barriers to entry (especially in urban locations)
  • Stable income and long-term capital appreciation

 

2. Life Sciences Labs: High Demand in Research Hubs

Specialist lab and research space is in high demand across Oxford, Cambridge, London, and parts of Scotland. Life sciences businesses require bespoke facilities, making tenant turnover low and returns consistent.

Strong drivers include:

  • Growth in biotech and pharmaceutical research
  • Government and private investment in health infrastructure
  • Reuse of underperforming office space for lab conversions

 

3. Cold Storage & Urban Logistics: Built for Modern Supply Chains

The cold storage market is heating up. E-commerce, food distribution, and pharmaceuticals all rely on temperature-controlled warehousing. Yet much of the UK’s cold chain infrastructure is outdated, opening doors for new investment.

Opportunities include:

  • Urban cold storage hubs for last-mile delivery
  • Conversion of older industrial units
  • High rental growth due to limited supply

 

4. Film & Media Studios: Lights, Camera, Capital

Streaming giants continue to invest in UK-based production. Areas like Manchester, Glasgow, and West London are seeing increased studio development.

Studios offer:

  • High demand from content producers
  • Long-term anchor tenants
  • Government tax incentives and business rate relief

 

5. Student & Co-Living Spaces: Resilient Residential Alternatives

Purpose-built student accommodation (PBSA) and co-living spaces in university cities remain popular, with rising student numbers and limited housing supply driving demand.

These properties often deliver:

  • Consistent rental yields
  • Strong occupancy rates
  • Capital growth in areas with undersupply

 

Why Investors Are Diversifying in 2025

What all these alternative sectors have in common is:

  • High tenant demand
  • Longer lease terms
  • Potential for conversion and repurposing
  • Strong ESG credentials (especially new builds and retrofits)

These factors make them more resilient in uncertain economic conditions and more attractive to forward-thinking investors.