If you’re a commercial property investor in today’s evolving market, choosing between office and industrial properties is more than a matter of preference. It’s a crucial decision with long-term implications.
At Louch Shacklock & Partners, we work closely with landlords across the UK, particularly in Milton Keynes and the surrounding regions, to help them make the best investments in the commercial property sector.
In this article, we compare office and industrial property investments from the perspective of current market conditions, prospects for future growth, demand from tenants. and considerations when it comes to management.
A Snapshot of the Office and Industrial Sectors in 2025
Office Sector
The office market has definitely shifted since the pandemic. However, while remote and hybrid working remain in place for many organisations, demand has not disappeared: it’s simply evolved.
Now, there’s a marked polarisation between low-grade office stock and high-quality spaces in good locations with strong ESG credentials.
In Milton Keynes and other places with strong growth, we’ve observed continued demand for modern office environments, particularly smaller, flexible spaces that support hybrid teams. Location, amenities and the quality of the fit-out are what make the biggest difference.
Key points:
- Demand for Grade A office space remains strong
- Secondary and tertiary stock may struggle to let or sell without being refurbished
- ESG and EPC requirements are reshaping investor decisions
The Industrial Sector
The industrial and logistics sector has outperformed most others over the past five years, partly driven by the e-commerce sector. Yields have tightened, and while values cooled slightly in 2023–2024, industrial remains a highly attractive asset class for many landlords.
In areas like Milton Keynes, with excellent connectivity via the M1 and the railway, industrial property has consistently low vacancy rates.
Key drivers include:
- Persistent demand from tenants in logistics and manufacturing
- Limited supply in popular areas like Milton Keynes
- Strong rental growth and high tenant demand
Which Has the Most Potential?
From a returns perspective, industrial property has generally outperformed offices over the past several years. According to recent IPF and MSCI data, prime industrial yields have stabilised around 5.0-5.75%, while offices can range from 6.0-7.5%, depending on location and the financial strength and reliability of a tenant.
However, this doesn’t tell the whole story. Office properties with strong benefits can outperform expectations, especially if acquired below market value or through off-market transactions. This is where experienced advisors make the difference.
Risk of Vacancies and Tenant Demand
Industrial
Industrial units in Milton Keynes typically let quickly if correctly sized and priced. The area benefits from a diversified industrial base, from ecommerce and logistics to advanced manufacturing.
For landlords, this increases the chance of sustained occupancy.
Office
Office vacancy rates can be more variable. Poor-quality space in secondary locations may remain empty for extended periods, while Grade A space is snapped up quicker.. Landlords must consider incentives for tenants, fit-out costs, and lease flexibility to remain competitive.
Capital Growth and Exit Strategy
Industrial
With strong demand from tenants and limited supply, industrial property continues to show solid potential for the growth of capital. It is also highly liquid, particularly in proven locations like Milton Keynes.
Office
The picture is more nuanced for offices. Capital values have softened in some parts of the market, especially for buildings lacking energy-efficiency. However, this also creates opportunity for investors looking to add value by upgrading to make it suitable for the modern occupier.
Management and Operational Complexity
Industrial units (especially single-let, modern warehouses) tend to require less day-to-day management. Repairs and maintenance responsibilities often fall to the tenant, and the tasks are relatively simple.
Offices may involve more intensive asset management: communal areas, service charges, shared amenities, and more frequent lease negotiations. That said, multi-let office properties can provide multiple streams of income and diversifying risks. .
So, Where Should You Invest?
Choose an industrial property If:
- You’re seeking consistent demand from tenants and lower vacancy risk
- You prefer lower less stress when it comes to management
- You’re targeting strong rental growth and stable long-term yields
Opt for an office if:
- You’re targeting undervalued assets for repositioning
- You have appetite for higher yields with a hands-on approach
- You can offer high-quality, well-located space with ESG credentials
Ultimately, the best investment isn’t just about type of asset: it’s about strategy, location, and execution. Milton Keynes offers compelling opportunities in both the industrial and office markets, and our Partner-level service ensures every transaction is aligned with your long-term objectives.
At Louch Shacklock & Partners, we apply decades of commercial property expertise to help landlords identify and act on opportunities with confidence. Whether you’re considering renovating an office or looking to acquire an industrial unit that’s in high demand, we’re here to guide every step of the way.
Simply contact our team for more details. Or explore our latest commercial properties for sale. We’re committed to helping you achieve better returns with less guesswork.