Beyond the Office: Why Data Centres and Alternative Property Types Are Leading Capital Growth in 2025
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As traditional office spaces face ongoing re-evaluation, investors are looking elsewhere for strong capital returns. In 2025, it’s alternative property types such as data centres, life sciences hubs, and logistics facilities that are generating growing interest.
The Data Centre Boom
Data centres have become one of the UK’s most valuable and resilient property assets. The rising tide of AI technology, cloud services, and digital transformation across sectors has turbocharged demand. According to Knight Frank, the European data centre market is expected to expand by 17% annually over the next three years, with London continuing to lead the way in capacity.
Capital values are reflecting this surge in demand. Investors are drawn to the long lease terms and stable occupancy, with hyperscalers (large-scale cloud service providers) and tech firms eager to lock down space.
Other Alternative Asset Classes on the Rise
Life Sciences Properties: Locations such as Cambridge, Oxford, and parts of Scotland—including Stirling—are witnessing increased development of lab and R&D facilities with the UK government allocating almost £14 billion of R&D funding.
Cold Storage & Urban Logistics:
E-commerce growth, growth in the frozen food market and a shift toward localised supply chains have driven investment in cold storage and last-mile distribution hubs. According to CBRE the UK market demand continues to exceed supply and there is currently an increase in development of new stock.
Film & Media Studios:
With the UK firmly established as a production hub, purpose-built studios—especially around London, Manchester, and Glasgow—are seeing increased investment. Demand from major streaming services makes these properties attractive to developers and investors alike. There is also a growing opportunity to turn a variety of commercial properties into a film location which can be a lucrative opportunity as a new revenue stream.
Student & Co-Living Accommodation:
Demand remains strong in key university cities. Purpose-built accommodation is delivering solid yields and long-term capital growth, particularly where undersupply is an issue.
Why Capital Growth is Strong in These Sectors
Alternative property types often benefit from long leases, specialist usage, and high tenant retention. Many are also better positioned to meet ESG (Environmental, Social, and Governance) criteria, particularly newer developments that prioritise energy efficiency. With investors placing greater emphasis on futureproofing portfolios, these sectors offer both performance and resilience.
Final Thoughts
As the commercial property market continues to evolve, alternative sectors are no longer just for specialist investors—they’re moving centre stage. Whether you’re looking for high-performing assets or simply want to diversify, data centres and other non-traditional property types are proving themselves key players in the capital growth story of 2025.
Looking to invest or list a property in one of these growing sectors?
Search NovaLoca’s commercial property listings for the latest opportunities across the UK.
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