I M P R O V I N G . . .
- John Evans
- Jul 29
- 3 min read
Embrace resilience; as conditions improve, those who remained focused are now poised for success.
The Australian Commercial Real Estate Industry is turning the corner
If the last six months have felt like trudging through a low‑volume, high‑stress market in Australia’s commercial property sector, you're not alone. But industry reports now point to a turning tide, with clear signs that the sluggish conditions are behind us, and a wave of business opportunities is rising. Your resilience will be rewarded as Commercial Real Estate rebounds.
Market Signals: Building Momentum
Fewer but Bigger Deals: Across FY24/25, Australia saw $59.9 billion in commercial real estate transactions. Meaning there were fewer deals overall, but with a larger average size, which signals a re-emerging confidence in dealmaking. Sources: Commercial Property Guide. Elite Agent.
Premium Prices Rising: Average sale prices for premium commercial assets climbed from A$3.64 million to A$3.9 million in 2024, being a 7% increase in investor appetite for quality properties.
Source: Commo.com.au.
Global Participation: Australia ranked as the 6th ‘most active’ global commercial real estate investment market in 2024, with global volumes up 8% to US$806 billion, while Australia climbed from 9th in 2023 to 6th.
Sources: Commo.com.au and Knight Frank Australia
Lenders with Capital: Ready to Back Growth
Bank Appetite Still Holding Up: Australian commercial real estate bank debt reached A$388.6 billion in September 2024, growing 6% year over year. While cautious, lending continues, particularly supporting industrial and retail sectors.
Sources: Commo.com.au and Cushman & Wakefield.
Debt Funds Leading the Way: As banks remain selective, Blackstone singlehandedly raised an US$8 billion global real estate debt fund, looking to support opportunities in Australia. Source: The Wall Street Journal.
Sector Recovery: Finally Accelerating in 2025
KPMG’s Commercial Property Uncertainty Index: It has dropped sharply between Q4 2024 and Q1 2025, with two out of three main commercial real estate sectors now delivering positive returns. Source: KPMG.
Trusted Predictions: Deloitte, JLL, Knight Frank and Cushman & Wakefield all forecast a gradual recovery in valuations and transaction flow through in 2025, especially when looking at CBD offices, industrial warehouses, and retail assets. Sources: KPMG, Commo.com.au and CommercialRealEstate.com.au.
Flagship Moves: Institutional Confidence
EY signed a 10‑year lease extension: 25,850m² at ~$1,550/m² anchored the Sydney CBD office market and pointed to a recovering demand curve. National vacancy has also eased to 14.9%. Source: The Australian.
Parkline Place: Oxford Properties rolled out its $1.3 billion Parkline Place tower in Sydney, citing only a 5% vacancy in premium grade buildings and committing to +A$6.5 billion in local investment. Source: The Australian.
Stockland and John Boyd: Together sealed a A$3.5 billion logistics hub deal at Sydney’s Cooks Cove, which has underscored investor-excitement and grows demand in both industrial and logistics commercial real estate. Source: The Australian.
Our Recent Tough Times have Built Your Mental Strength
If your organisation navigated the volatility of the past six months, with its lean deals, cautious lenders, flat momentum, you have already demonstrated your mental toughness. Recent examples demonstrate that your grit now sets the stage for opportunity.
Premium tenants like EY are choosing long‑term leasing, boosting face‑rent visibility.
Institutional players like Oxford and Stockland are investing in large‑scale developments.
Investors are deploying record capital into industrial and logistics, with tight supply fuelling competition.
We believe that your perseverance didn't go unnoticed.
As commercial real estate gears up for a growth cycle through the last 5 months of 2025 and then into 2026, you're well‑placed to capitalise.
Lower valuations and abundant dry powder are presenting first‑mover advantages, especially in core assets. Sources: The Australian and The Couriermail.com.au
Anticipated RBA rate cuts later this year may also drive rebounding demand and capital flows.
Sector Opportunity Signals
CBD Office: Tenant renewals, rental uplift, vacancy easing suggests you should secure longer leases and re-value your well‑located assets.
Industrial and Logistics: Massive developments are underway and capital is flowing suggests its time to capture leasing momentum and rental growth.
Premium Retail: Tight vacancies with aggressive pricing still means you can leverage your appetite with low-risk, income-yielding assets.
Final Thoughts
The last 6 months has tested everyone’s mettle. Although, they have also primed us all for the next wave. With broad investor re-engagement, price bottoms are finally being hit, and the CBD office, industrial, logistics and premium retail sectors are all leading rallies for recovery, this all points to a strong foundation forming for prosperity ahead for commercial real estate.
#CommercialRealEstate #RealEstateRecovery #Positivity #PlanForTheFuture #InvestmentRecovery #2025Recovery #CommPropGroup #LFRAdvisory #Hardserv #Softserv
Comments