Australia Commercial Real Estate Market: Industry Trends, Share

Australia Commercial Real Estate Market Overview

Market Size in 2024: USD 11.96 Billion

Market Size in 2033: USD 21.03 Billion

Market Growth Rate 2025-2033: 5.80%

According to IMARC Group's latest research publication, "Australia Commercial Real Estate Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2025-2033", The Australia commercial real estate market size reached USD 11.96 Billion in 2024. Looking forward, IMARC Group projects the market to reach USD 21.03 Billion by 2033, exhibiting a growth rate (CAGR) of 5.80% during 2025-2033.

How Investment Diversification and Hybrid Work are Reshaping the Future of Australia Commercial Real Estate Market

• Driving Investor Diversification: Corporates and SMEs commanded 60% market share in 2024 reflecting Australia's services-oriented economy, while individuals and households supported by fractional ownership platforms are matching that segment's 6.01% growth rate and diversifying the investor base.

• Powering Retail Market Strength: Perth retail market's annual median sale price per square meter reached AUD 5,238 by end of March, representing 23.8% increase over the year, with broad range of investors turning to retail properties due to rising vacancy rates in other commercial sectors.

• Enhancing Office Market Challenges: Melbourne CBD recorded highest office vacancy rate at 18% in Q1 2024, while Sydney CBD showed 14.3% vacancy rate, reflecting ongoing adjustments as businesses adapt to hybrid work models and reconfigure space requirements post-pandemic.

• Attracting Industrial Demand: Driven by e-commerce and logistics demands, warehouses and industrial properties remain in strong demand with vacancy rates staying steady around 6.8% in Q3 2024, demonstrating resilience compared to office and retail sectors experiencing higher vacancies.

• Strengthening Market Outlook: Many industry respondents expect conditions including rental rates, leasing activity, vacancies, and cost of capital to improve through 2026, with 65% anticipating positive market conditions despite macroeconomic uncertainties affecting commercial real estate fundamentals.

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Australia Commercial Real Estate Market Trends & Drivers:

Australia's commercial real estate market is experiencing significant transformation driven by investor diversification and the expansion of fractional ownership platforms that are democratizing access to commercial property investment. Corporates and SMEs commanded a 60% market share in 2024, reflecting Australia's services-oriented economy and the traditional dominance of institutional investors in commercial property markets. However, individuals and households, supported by emerging fractional ownership platforms, are matching that segment's 6.01% compound annual growth rate and diversifying the investor base. This democratization trend is creating new capital sources for commercial real estate development while enabling retail investors to participate in asset classes previously accessible only to institutional players, fundamentally reshaping market dynamics and ownership structures.

The retail property sector is demonstrating unexpected resilience and attracting increased investor attention as alternative investment opportunities amid office market challenges. The Perth retail market's annual median sale price per square meter reached AUD 5,238 by the end of March, representing a substantial 23.8% increase over the year and 6.3% higher than the 12 months to December 2024. Industry professionals report seeing a broad range of investors, with many turning to retail properties specifically due to rising vacancy rates in other commercial sectors, particularly office spaces. This shift reflects recognition that well-located retail properties with strong tenant mixes can deliver stable returns even as consumer shopping patterns evolve, while the sector benefits from pent-up demand following pandemic-related disruptions.

Office markets are experiencing significant structural adjustments as hybrid work models reshape demand patterns and space utilization across major Australian cities. Melbourne CBD recorded the highest office vacancy rate at approximately 18% in the first quarter of 2024, while Sydney CBD showed a comparatively lower 14.3% vacancy rate, reflecting different market dynamics and tenant requirements across major metropolitan areas. The national office CBD vacancy rate rose to 13.7% in H2 2024, reaching the highest level since the mid-1990s as supply additions outpaced positive demand. These elevated vacancy rates are driving landlords to invest in building upgrades, amenities, and flexible space configurations that appeal to tenants prioritizing employee experience and collaborative work environments. Many industry experts expect conditions including rental rates, leasing activity, and vacancies to improve through 2026, with 65% anticipating positive market developments despite ongoing macroeconomic uncertainties.

Australia Commercial Real Estate Market Industry Segmentation:

The report has segmented the market into the following categories:

Property Type Insights:

• Office Buildings

• Retail Properties

• Industrial & Logistics

• Hospitality

• Mixed-Use Developments

• Others

Investment Type Insights:

• Direct Investment

• REITs

• Fractional Ownership

• Joint Ventures

• Others

Investor Category Insights:

• Corporates & SMEs

• Institutional Investors

• High Net Worth Individuals

• Retail Investors

• Foreign Investors

• Others

Location Type Insights:

• CBD Properties

• Non-CBD Properties

• Regional Centers

• Suburban Locations

• Others

End User Insights:

• Corporate Tenants

• Retail Tenants

• Industrial Users

• Hospitality Operators

• Others

Breakup by State:

• New South Wales

• Victoria

• Queensland

• Western Australia

• South Australia

• Tasmania

• Northern Territory

• Australian Capital Territory

Recent News and Developments in Australia Commercial Real Estate Market

• Q1 2024: Melbourne CBD recorded highest office vacancy rate at 18% while Sydney CBD showed 14.3% vacancy rate, reflecting ongoing market adjustments as businesses adapt to hybrid work models and reconfigure their commercial space requirements.

• March 2025: Perth retail market's annual median sale price per sqm reached AUD 5,238, representing 23.8% increase over the year, with broad range of investors turning to retail properties due to rising vacancy rates in other commercial sectors.

• 2024: Corporates and SMEs commanded 60% market share reflecting Australia's services-oriented economy, while individuals and households supported by fractional ownership platforms matched that segment's 6.01% CAGR, diversifying the commercial real estate investor base.

• 2024-2026: Industry outlook remained cautiously optimistic with 65% of respondents expecting conditions including rental rates, leasing activity, vacancies, and cost of capital to improve through 2026 despite macroeconomic uncertainties affecting commercial real estate fundamentals.

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

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