Commercial Property Market in Australia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

the Outlook of the Australian Commercial Property Market Report is Segmented by Type (office, Retail, Industrial and Logistics, Hospitality, and Other Types) and by Key Cities (Sydney, Melbourne, Brisbane, Adelaide, Canberra, and Perth). the Report Offers Market Sizes and Forecasts in Value (USD) for all the Above Segments.

Australian Commercial Property Market Size

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Australia Commercial Real Estate Market Summary
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Study Period 2019 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 34.07 Billion
Market Size (2029) USD 51.14 Billion
CAGR (2024 - 2029) 8.46 %
Market Concentration Low

Major Players

Australia Commercial Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Australian Commercial Property Market Analysis

The Australia Commercial Real Estate Market size is estimated at USD 34.07 billion in 2024, and is expected to reach USD 51.14 billion by 2029, growing at a CAGR of 8.46% during the forecast period (2024-2029).

The Australian property sector experienced significant uncertainty and transformation in 2020. The COVID-19 pandemic saw employees choosing to work flexibly and increased consumer demand for e-commerce. This disrupted the market and created several opportunities for investors, landlords, and occupiers alike.

In 2022, it was a new era for commercial real estate in Australia, with low interest rates, sustained government stimulus, and a population emerging from pandemic-induced lockdowns that are expected to increase their spending. The market outlook looks promising for commercial real estate investors, bolstered by cheap debt, structural changes, and the under-allocation of real assets.

Two major forces influencing Australia's commercial real estate market are urbanization and population expansion. Further, the business has seen several trends recently, including improved accessibility, shared office spaces, and digital connectivity. In particular, with a hard climate for many areas on the horizon, more innovation in the sector will be necessary to maintain consistent growth. Even before the coronavirus epidemic struck the country, a fall in the value of commercial building activity in Australia was already expected.

Over the years, Melbourne and Sydney's prime office space has experienced high rents and little vacancy. While interest in flexible working spaces has fluctuated, investment in office real estate has remained consistent. This is partly because of the effects of the coronavirus epidemic. Typically, these coworking spaces are hired out temporarily. Companies that don't want to commit to a lengthy lease for office space that is not completely utilized may find this appealing.

Australian Commercial Property Market Trends

Office real estate is expected to drive the market

In the third quarter of 2022, the yield of prime office real estate in the central business district of Western Australia was 6.36 percent. In comparison, the yield of prime office real estate in New South Wales was 4.5 percent. As of July 2022, about 40 percent of investment in commercial real estate in Australia went to the office sector. That same year, the industrial sector received about 18 percent of the commercial real estate investment in the nation.

In the third quarter of 2022, the incentives for prime office real estate in the central business district of Western Australia were the highest at 49 percent. In contrast, the Australian Capital Territory had the lowest incentives at 25 percent. In the states of Queensland and Victoria, incentives for prime office real estate were at 41.1 and 40.3 percent, respectively. The central business district in New South Wales had the highest average net face rent of prime office property in Australia in the third quarter of 2022, with an average net face rent of 1,323 Australian dollars per square meter. The central business district in Victoria had an average net face rent of 689 Australian dollars per square meter of office property in Australia.

In the third quarter of 2022, the office vacancy rate in the central business district of Perth, Australia, was the highest, with a rate of around 19.3 percent. The central business district of Sydney had an office vacancy rate of 13.7 percent. In November 2022, the office occupancy, as a share of pre-COVID-19 levels in the central business district of Perth, Australia, was 80 percent. Canberra CBD office occupancy was at 52 percent of pre-COVID-19 levels in the same month.

Australia Commercial Real Estate Market: Yield of prime office CBD real estate in Australia in third quarter 2022, in percentage, by state

Increase in Investments in Commercial sector

The past year has seen several significant shifts in the Australian economy and investment market. The biggest residential property markets struggle with the effects of increasing interest rates and rising inflation. Led by the record-breaking USD 3.8 billion acquisition of the Milestone logistics portfolio by ESR, industrial and logistics sales rose to USD 13 billion over the first nine months of the year, compared to the volume in 2020, which was USD 5.3 billion.

Although many malls are still struggling due to the rise of online sales and lockdown restrictions, retail investment activity has also rebounded. While Singapore, China, and Hong Kong drastically reduced their economic commitment to Australian real estate this year, the USA and Germany represented investment growth this year, demonstrating the growing confidence that foreign buyers have in the local market. As of July 2022, about 45 percent of commercial real estate transaction activities in Australia were in New South Wales. That same year, Western Australia had about 1.5 percent of the commercial real estate transaction activities in the nation.

According to Commercial Real Estate, the value of investment-grade industrial property in Australia will pass the value of office property for the first time in 2026. This is because logistics real estate values are going up, and new, larger facilities are being built to accommodate the growth of e-commerce.

Australia Commercial Real Estate Market: Share of investment in commercial real estate in Australia in Q2 2022, by location

Australian Commercial Property Industry Overview

The Australian commercial real estate market is strong and highly competitive. Australian commercial real estate is becoming a preferred destination for global institutional investors, driven by robust office space take-up, declining vacancy levels, and rising rentals. Small-scale developers are also merging with big real estate developers or exiting the market. Some of the country's major commercial real estate players include Lendlease Corporation, Scentre Group Limited, Mirvac, Pact Construction, and Multiplex Constructions Pty Ltd.

Australian Commercial Property Market Leaders

  1. Lendlease Corporation

  2. Scentre Group Limited

  3. Mirvac

  4. Pact Construction

  5. Multiplex Constructions PTY Ltd

*Disclaimer: Major Players sorted in no particular order

Australia Commercial Real Estate Market Concentration
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Australian Commercial Property Market News

  • October 2022: X Commercial opened its fifth office in Sydney, following a merger and acquisition of Industrial Zone Real Estate in Padstow in the South-West Corridor. Their strategic growth plans included the opening of offices in each of Sydney's main industrial and commercial markets.
  • August 2022: Colliers International, a top provider of diverse professional services and investment management, announced the acquisition of a majority stake in Peakurban Pty Limited, one of Australia's fastest-growing engineering firms. Under the special partnership model of Colliers, the senior leadership team of Peakurban was to continue to have a sizable stake in the company. The company was expected to adopt the "Colliers Engineering & Design" moniker and become a part of Colliers' current Australian operations.

Australia Commercial Real Estate Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Drivers

      1. 4.1.1 Rapid Urbanization

      2. 4.1.2 Government Initiatives Actively promoting the Construction Activities

    2. 4.2 Restraints

      1. 4.2.1 Shortage of Skilled Labor

      2. 4.2.2 Supply chain issues and rising material costs

    3. 4.3 Opportunities

      1. 4.3.1 Technological Innovations

    4. 4.4 Value Chain / Supply Chain Analysis

    5. 4.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.5.1 Bargaining Power of Suppliers

      2. 4.5.2 Bargaining Power of Buyers/Consumers

      3. 4.5.3 Threat of New Entrants

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

  5. 5. MARKET INSIGHTS

    1. 5.1 Current Economic Scenario and Consumer Sentiment

    2. 5.2 Commercial Real Estate Buying Trends - Socioeconomic and Demographic Insights

    3. 5.3 Government Initiatives and Regulatory Aspects for Commercial Real Estate Sector

    4. 5.4 Insights into Existing and Upcoming Projects

    5. 5.5 Insights into Interest Rate Regime for General Economy and Real Estate Lending

    6. 5.6 Insights into Rental Yields in the Commercial Real Estate Segment

    7. 5.7 Insights into Capital Market Penetration and REIT Presence in Commercial Real Estate

    8. 5.8 Insights into Public-Private Partnerships in Commercial Real Estate

    9. 5.9 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, Property Management)

    10. 5.10 Impact of COVID-19 on the Market

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 Office

      2. 6.1.2 Retail

      3. 6.1.3 Industrial and Logistics

      4. 6.1.4 Hospitality

      5. 6.1.5 Other Types

    2. 6.2 By City

      1. 6.2.1 Sydney

      2. 6.2.2 Melbourne

      3. 6.2.3 Brisbane

      4. 6.2.4 Adelaide

      5. 6.2.5 Canberra

      6. 6.2.6 Perth

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Overview (Market Concentration and Major Players)

    2. 7.2 Company Profiles

      1. 7.2.1 Lendlease Corporation

      2. 7.2.2 Scentre Group Limited

      3. 7.2.3 Mirvac

      4. 7.2.4 Pact Construction

      5. 7.2.5 Multiplex Constructions Pty Ltd.

      6. 7.2.6 Meriton Apartments Pty Ltd.

      7. 7.2.7 Stockland

      8. 7.2.8 Frasers Property

      9. 7.2.9 Pellicano Builders

      10. 7.2.10 Qube Property Group Pty Ltd*

    3. *List Not Exhaustive
    4. 7.3 Other Companies

  8. 8. FUTURE OF THE MARKET

  9. 9. APPENDIX

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Australian Commercial Property Industry Segmentation

Commercial real estate (CRE) is a property used exclusively for business or workplace purposes or to generate cash flow in some way for the owner or lessee. The commercial real estate market in Australia is segmented by type (office, retail, industrial and logistics, hospitality, and others) and by key cities (Sydney, Melbourne, Brisbane, Adelaide, Canberra, and Perth). 

The report offers market size and forecasts for the Australian commercial real estate market in terms of value (USD) for all the above segments.

By Type
Office
Retail
Industrial and Logistics
Hospitality
Other Types
By City
Sydney
Melbourne
Brisbane
Adelaide
Canberra
Perth
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Australia Commercial Real Estate Market Research Faqs

The Australia Commercial Real Estate Market size is expected to reach USD 34.07 billion in 2024 and grow at a CAGR of 8.46% to reach USD 51.14 billion by 2029.

In 2024, the Australia Commercial Real Estate Market size is expected to reach USD 34.07 billion.

Lendlease Corporation, Scentre Group Limited, Mirvac, Pact Construction and Multiplex Constructions PTY Ltd are the major companies operating in the Australia Commercial Real Estate Market.

In 2023, the Australia Commercial Real Estate Market size was estimated at USD 31.41 billion. The report covers the Australia Commercial Real Estate Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Australia Commercial Real Estate Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

Australia Commercial Real Estate Industry Report

Statistics for the 2024 Australia Commercial Real Estate market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Australia Commercial Real Estate analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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Commercial Property Market in Australia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)