Should You Buy or Rent Commercial Space in Leicester?

Choosing between buying or renting a commercial property is one of the most significant decisions a business can make. Whether you’re a start-up looking for your first office, or a growing company planning your next move, understanding your options is crucial, especially in a competitive and evolving market like Leicester.

Why This Decision Matters More Than Ever in 2025

Leicester’s commercial market has continued to shift throughout 2024 and into 2025. With rising interest rates, changing work habits, and increasing pressure on businesses to remain flexible, the question of whether to rent or buy commercial space has never been more relevant.

In the first quarter of 2025, market data indicates that demand for smaller, flexible commercial units has been rising, particularly among SMEs. This trend is especially evident in cities like Leicester, where hybrid working practices have increased the need for adaptable workspaces. At the same time, long-term commercial assets in established urban areas continue to attract investors seeking stable and reliable returns.

Supporting this trend, the RICS UK Commercial Property Monitor reported a small but steady rise in occupier demand across both the office and industrial sectors, with net balances of +6% and +9% respectively in the first quarter of 2025. This points to a cautiously optimistic market outlook, particularly in regional centres such as Leicester, where flexible commercial space remains in high demand.

Given this context, it is important to consider the respective advantages and disadvantages of both options before making a decision.

The Pros of Buying Commercial Property in Leicester

Long-Term Investment Potential

Owning a commercial property can be a strategic move, especially for businesses planning to operate from a location for ten years or more. According to PropertyData’s 2024 analysis, UK commercial property values have grown by an average of 4.7% per year over the past decade, making ownership a potentially lucrative investment. Over time, the property may appreciate, offering you potential capital gains on top of any income you generate.

Security of Tenure and Control Over Premises

With ownership comes control. You won’t need to negotiate lease renewals or worry about rent increases. You can also make modifications as you see fit – ideal if you need a custom setup.

Build Equity and Benefit from Capital Growth

Paying off a mortgage builds equity in the asset, rather than funding a landlord’s investment. Over the years, your business could benefit from both asset growth and a strong balance sheet.

Things to Consider When Buying Commercial Property in Leicester

Higher Upfront Costs & Maintenance Responsibility

Buying commercial premises requires a significant capital outlay, often including a deposit, legal fees, stamp duty, and fit-out costs. You’ll also be responsible for ongoing maintenance and insurance.

Less Flexibility for Expanding or Downsizing

If your business grows quickly, or if you need to scale down, your business could become constrained by premises that no longer align with your requirements.

The Pros of Renting Commercial Property in Leicester

Lower Initial Costs and Predictable Monthly Outgoings

Renting typically requires a smaller upfront investment. You can preserve working capital for other areas of your business.

Greater Flexibility and Mobility

Leases often come with break clauses or shorter terms, allowing you to adapt your space to your business needs more easily.

Maintenance is Often Covered by the Landlord

Most commercial leases place responsibility for major repairs and external maintenance on the landlord, reducing your day-to-day operational concerns.

Things to Consider When Renting Commercial Property in Leicester

No Asset Growth or Equity

Monthly rent payments don’t contribute to ownership, meaning there’s no long-term return unless your business uses the space to generate profit.

Potential for Rent Increases and Lease Restrictions

Landlords may increase rent at renewal or include restrictions on signage, subletting, or permitted use.

Essential Factors to Consider Before Making a Decision

Your Business Stage and Growth Forecast

Start-ups and scale-ups often prefer renting due to flexibility, while established firms might benefit from the stability of ownership.

Available Capital and Financing Options

If you have access to commercial mortgage products or investor backing, buying might be more feasible.

Leicester Location-Specific Market Trends (2025)

According to current listings, office rents in Leicester City Centre range from £8 to £16 per sq ft, while freehold properties start from £200,000 upwards depending on size and location. Speak with a member of our team at Readings to discuss the price comparisons. 

Making the Right Choice for Your Business

There is no universally correct approach. If your business values long-term investment and control, buying may be best. If you need flexibility and want to conserve capital, renting could be the smarter move for now.

Before deciding, speak to a professional at Readings who understands the Leicester commercial market.

How Readings Can Help

Whether you’re looking to buy or rent, our commercial property experts are here to guide you every step of the way. From helping you understand lease terms to identifying investment opportunities, Readings Property Group offers clear, professional advice based on decades of experience in the Leicester market.

We assist with:

• Sales and lettings of retail, office, and industrial units
• Property management
• Lease advisory and valuations
• Commercial property auctions

Explore our commercial services here

Thinking about your next commercial move in Leicester? Contact our team today to arrange a consultation or explore current listings.