Real Estate as a Strategic Lever: How Corporates Are Rethinking Their Property Portfolios

Amid a higher-for-longer interest rate environment, variable occupational demand and the rise of hybrid work, UK corporates are treating their real estate assets as a strategic lever rather than a fixed income stream. Property owners are re-evaluating their assets and focusing on operational resilience. The result is a strategic pivot from passive ownership to active portfolio management.

Across sectors, occupiers are consolidating underutilised space, prioritising high performing energy efficient assets, whilst also repurposing/redeveloping underutilised office space into purpose-built mixed-use spaces or co-working hubs as well as disposing of non-performing assets. 

Sale and leasebacks remain active with a key focus on ensuring the terms of the underlying long lease (including rental indexation mechanics) are profitable long-term. Highlighting that whilst corporates may be adjusting asset classes within their portfolios, traditional financial models remain popular in the current climate. 

In keeping up with market demand, investors have left behind the multi property portfolio acquisitions and are instead drawn to high-quality prime single assets. This is particularly true in the hotel space where single hotel sales made up 85% of total investment in 2025. The single asset trend emphasises quality over quantity when managing portfolios. 

With the rise of AI, data centres have become an asset class in demand and continue to attract substantial investment. In contrast, suburban offices face repositioning within investor portfolios. Meanwhile, e-commerce and life science assets continue to thrive. 

Location also remains paramount. Despite looming interest rates and the rise of hybrid working, the Central London property market continues to flourish. Sustainable (in line with minimum standard EPC requirements) and ‘smart’ office buildings and prime retail parks (with proven strong footfall) remain value add assets with a key place within investor portfolios.  

Despite the predicted downturn of high street retail following the pandemic, corporates have adapted their traditional shopping centre assets by introducing dining and leisure (such as go karting, bowling and many other hybrid leisure activities), thereby creating an enhanced shopping experience beyond the more traditional model.  This is another key example of the importance of dynamic portfolio adjustments to manage assets strategically to enhance revenue. 

Property investors and corporates therefore continue to adjust and actively manage their property portfolios to maximise value and efficiency.