The Alternatives Series: Why Alternatives Have Become the Investment of Choice

22 July 2026

The Alternatives Series: Why Alternatives Have Become the Investment of Choice

Key Contact

National Head of Alternatives, Partner Philip Waite

T: 07511 873005 Email

For decades, commercial real estate (CRE) followed a predictable playbook. Investors allocated the vast majority of their capital to the “Big Three” traditional sectors: retail, offices, and industrial. But the traditional stranglehold on CRE capital has officially been loosened.

Historically, traditional sectors accounted for 70% to 90% of overall UK investment activity. However, a decade-long shift culminated in a historic milestone in 2025 when investment into alternative real estate sectors accounted for 51% of all UK real estate investment.

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Growth of Alternative Real Estate Investment in the UK

The shift is driven by a fundamental search for yield. As macroeconomic pressures squeeze traditional office and retail valuations, alternative assets, ranging from student housing and healthcare to leisure and community hubs, offer robust, diversified income streams.

2015-2022 Average Share: 33% Alternatives / 67% Traditional

2023-2025 Average Share: 50% Alternatives / 50% Traditional

2025 Share: 51% Alternatives / 49% Traditional

Resilient Volumes

Despite a challenging global economic climate, total UK CRE investment approached its 10-year average in 2025, recording just under £60 billion in activity. This resilience was heavily propped up by alternatives.

What we are witnessing is not a temporary trend or a defensive posture; it is a lasting reallocation of capital. Institutional investors have realised that sectors addressing core societal needs, such as senior living, specialised healthcare, and student housing, are fundamentally insulated from the cyclical downturns that plague traditional office and retail spaces.

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