Australia Commercial Real Estate Market Analysis by Mordor Intelligence
The Australia commercial real estate market is valued at USD 52.33 billion in 2025 and is forecast to reach USD 67.81 billion by 2030, reflecting a 5.32% CAGR over 2025-2030. This steady expansion signals the sector’s resilience as post-pandemic recovery, government infrastructure spending, and accelerating digitalization lift demand across offices, logistics assets, hotels, and data-center facilities. Institutional investors are rotating capital toward core assets in Sydney and Melbourne, while data-localization rules are propelling hyperscale and edge data-center pipelines in several metropolitan areas. Hybrid work adoption continues to reshape CBD office requirements, yet premium ESG-compliant buildings in connectivity-rich precincts attract flight-to-quality tenants willing to pay rental premiums. Meanwhile, elevated construction costs and labor shortages are curbing new supply, tightening vacancy in prime logistics hubs and further supporting rent growth.
Key Report Takeaways
- By property type, offices held a 31.0% revenue share of the Australian commercial real estate market in 2024, while logistics assets are projected to grow at a 5.91% CAGR to 2030.
- By business model, the sales segment commanded 72.0% of the Australian commercial real estate market share in 2024; rentals are expected to advance at a 6.01% CAGR through 2030.
- By end-user, corporates and SMEs accounted for a 60.0% share of the Australian commercial real estate market size in 2024, whereas the individuals/households segment is expanding at a 6.01% CAGR to 2030.
- By geography, New South Wales led with 37.0% market share in 2024; Queensland is the fastest-growing region, rising at a 5.96% CAGR to 2030 Brisbane Times.
Australia Commercial Real Estate Market Trends and Insights
Drivers Impact Analysis
Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Accelerated demand for prime industrial and logistics space driven by e-commerce | +1.2% | National, concentration in Sydney, Melbourne, Brisbane corridors | Long term (≥4 years) |
Government-backed infrastructure pipeline lifting commercial land values | +0.9% | Queensland, New South Wales | Long term (≥4 years) |
Surge in institutional capital allocation to core office assets | +0.8% | New South Wales, Victoria, spillover to Queensland | Medium term (2-4 years) |
Data-localization mandates fueling edge data-center development | +0.7% | Sydney, Melbourne, Perth | Medium term (2-4 years) |
Re-rating of ESG-compliant green buildings unlocking premium rents | +0.6% | Sydney CBD, Melbourne Docklands | Medium term (2-4 years) |
Rebound in international tourism revitalising CBD hotel RevPAR | +0.4% | Sydney, Melbourne CBDs | Short term (≤2 years) |
Source: Mordor Intelligence
Surge in Institutional Capital Allocation to Core Office Assets
Transaction volumes in the office sector climbed 70% year-on-year to USD 4 billion during H1 2024 as foreign investors identified pricing dislocations in prime CBD towers. Capital is gravitating to trophy assets offering strong tenant covenants, sustainability credentials, and repositioning potential. Sydney’s Collins Street precinct recorded effective rental growth in 16% of prime buildings as occupiers pursued amenity-rich space that supports hybrid work collaboration. Investor conviction remains anchored in Australia’s stable legal framework and transparent leasing structures, positioning core offices as a defensive allocation within global portfolios. Portfolio managers also anticipate that the cyclical low in CBD valuations will converge with long-term occupational demand once hybrid strategies stabilize.
Accelerated Demand for Prime Industrial & Logistics Space Driven by E-Commerce
Warehouse vacancy has compressed to nearly 1%, driving double-digit rental growth in Sydney and Brisbane corridors as retailers and 3PLs secure last-mile assets near dense population clusters. Industrial properties now facilitate USD 1.2 trillion of goods flow annually, equating to 38% of household consumption. Supply-chain onshoring and automation requirements are prompting developers to prioritize high-clearance, technology-enabled facilities, with Perth registering the nation’s fastest sequential rental increase at 1.8%. These conditions underpin sustained outperformance of logistics within the Australia commercial real estate market.
Government-Backed Infrastructure Pipeline Lifting Commercial Land Values
Federal and state commitments of USD 1.4 billion for new digital and transport projects are unlocking greenfield precincts and enhancing connectivity in Western Sydney, Brisbane, and regional hubs. Brisbane’s Olympic infrastructure has already tightened CBD vacancy to 11.6% as corporates reposition close to transit nodes. Charter Hall’s USD 1.3 billion Chifley South campus near Western Sydney International Airport illustrates how public spending catalyzes private investment and elevates commercial land values. The multiplier effect is expected to extend well into the next decade.
Re-Rating of ESG-Compliant Green Buildings Unlocking Premium Rents
Australia’s inaugural Green Treasury Bond issuance in June 2024 confirmed sovereign backing for sustainable finance, spurring developers to embed net-zero features in new projects. Mandatory climate-related disclosures from 2025 will heighten corporate scrutiny of building performance, making green ratings a prerequisite for major occupiers. In Melbourne Docklands, certified assets secure lease rates 8% above comparable stock, reflecting operational cost savings and reputational benefits for tenants. As a result, ESG compliance is shifting from value-add to baseline expectation within the Australia commercial real estate market[1]Reserve Bank of Australia, “Australian Government Green Bond Framework,” Reserve Bank of Australia, rba.gov.au.
Restraints Impact Analysis
Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Persistent work-from-home adoption softening CBD office net absorption | –1.1% | Sydney, Melbourne CBDs | Long term (≥4 years) |
Elevated construction costs and labour shortages delaying project delivery | –0.9% | National, most acute in Perth, Brisbane | Medium term (2-4 years) |
Monetary tightening and rising cap rates compressing transactions | –0.7% | Secondary markets nationwide | Short term (≤2 years) |
Heightened climate-risk exposure raising insurance premiums for coastal assets | –0.5% | Queensland, New South Wales coastal corridors | Long term (≥4 years) |
Source: Mordor Intelligence
Persistent Work-from-Home Adoption Softening CBD Office Net Absorption
Regular remote work remains the norm for 36% of Australia’s workforce, limiting space take-up and pushing Sydney and Melbourne vacancy above historic averages. Tenants are reducing footprints through desk-sharing and flexible workspace solutions while redirecting savings to premium fit-outs that enhance collaboration. Sub-lease availability has grown, intensifying competition among landlords to secure credit-worthy occupiers. Although 83% of CEOs expect full office returns within three years, prevailing behavioral patterns suggest hybrid models will persist, tempering absorption forecasts within the Australia commercial real estate market.
Elevated Construction Costs & Labour Shortages Delaying Project Delivery
Insolvencies surpassed 1,987 construction firms in the 12 months to March 2024, highlighting acute supply-side constraints. Material inflation and a 90,000-worker shortfall are extending development timelines, particularly in Perth high-rise projects where developers seek additional state concessions to maintain project viability. New energy-efficiency codes add USD 14,000–USD 18,000 to the average commercial build, squeezing margins and delaying completions. These delays underpin rising replacement costs and bolster rental resilience for standing prime stock.
Segment Analysis
By Property Type: Logistics Drives Structural Transformation
Logistics captured 5.91% CAGR growth momentum and remains the fastest-advancing segment, while offices retained the largest 31% share of the Australia commercial real estate market in 2024. E-commerce penetration, onshoring of inventories, and automation investments have converted fulfillment centers into critical infrastructure, anchoring long-term demand. Vacancy below 1% in core east-coast corridors combined with restrictive land-use policies elevates pricing power for institutional landlords. Major players such as Goodman Group and GPT are scaling speculative builds to meet pre-commitments from retailers and 3PLs, often securing lease terms exceeding 10 years. Data-center campuses, classified as systems of national significance, add a high-value layer within industrial estates, attracting foreign capital and specialty operators.
Modern warehouses increasingly incorporate robotics, mezzanine floors, and high-capacity power to accommodate micro-fulfillment and cold-chain functions. These features command rental uplifts of 15%-20% compared with legacy stock. With the Australia commercial real estate market size for logistics assets projected to expand at 5.91% CAGR through 2030, investors view the segment as a secular outperformer. In contrast, office landlords are recalibrating portfolios by divesting non-core B-grade towers and reinvesting in mixed-use redevelopments to mitigate prolonged occupancy pressure.
Note: Segment shares of all individual segments available upon report purchase
By Business Model: Rental Segment Gains Momentum
The sales model represented 72% of 2024 transaction value, yet the rental model posted the strongest 6.01% CAGR outlook, mirroring corporate moves to maintain balance-sheet agility. Sale-leaseback deals allow occupiers to unlock capital while preserving operational control, exemplified by Dexus’s USD 300 million fundraising for its second opportunity fund targeting such transactions. Build-to-rent logistics and data-center projects offer institutional investors stable cash flows indexed to CPI, making them core allocations in diversified portfolios. As a result, the Australia commercial real estate market size attributed to rental agreements is set to expand steadily through 2030.
Landlords leveraging technology-enabled property-management systems deliver ESG upgrades, energy monitoring, and predictive maintenance at scale, reducing occupant costs and underpinning longer lease renewals. Flexible lease structures and options for expansion align with occupiers’ shifting headcount forecasts under hybrid work. Consequently, competition is intensifying among landlords to provide turnkey, sustainability-compliant spaces, reinforcing the shift toward the rental paradigm within the Australia commercial real estate market.
By End-User: Corporate Demand Evolution
Corporates and SMEs commanded a 60% share in 2024, reflecting Australia’s services-oriented economy. However, individuals and households, supported by fractional ownership platforms, are matching that segment’s 6.01% CAGR and diversifying the investor base. SMEs lead the adoption of coworking solutions and short-term industrial leases, reducing average lease terms to around five years in metropolitan submarkets. Larger corporates focus on premium health-certified environments to attract and retain talent, increasing demand for WELL-rated buildings that integrate natural light, collaborative zones, and touchless technologies.
High-net-worth individuals are allocating to neighborhood retail and small industrial strata through syndicates and crowdfunding vehicles. These retail investors prize assets with strong ESG credentials and resilient income profiles, creating liquidity for smaller lot sizes. The trend widens demand diversity and supports liquidity depth across asset classes in the Australia commercial real estate market.

Note: Segment shares of all individual segments available upon report purchase
Geography Analysis
New South Wales held a 37% share of the Australia commercial real estate market in 2024, anchored by Sydney’s status as the nation’s financial hub and by sustained institutional interest in its core office towers. State infrastructure rollouts such as the Sydney Metro extensions, completed in August 2024, are improving accessibility and supporting land-value appreciation along transit corridors. Office landlords in the Barangaroo precinct benefit from flight-to-quality leasing, while logistics investors target Western Sydney sub-markets near the new airport where inbound cargo capacity is set to soar.
Queensland represents the fastest-growing geography with a 5.96% CAGR projection through 2030, buoyed by Olympic-related capital projects and an expanding Brisbane-Toowoomba logistics spine. The Cross River Rail and port upgrades are drawing national retailers to secure warehouse capacity ahead of supply shortages, compressing yields across industrial estates[2]John Forrest, “Cross-River Rail Economic Benefits Statement,” Queensland Government, infrastructure.qld.gov.au. Brisbane CBD absorption improved despite hybrid work trends, aided by state incentives for back-office consolidation and by relocations from southern states seeking lower occupational costs. Tourism-driven hotel demand in the Gold Coast and Sunshine Coast adds a complementary boost to the regional commercial mix.
Victoria faces a slower near-term recovery as Melbourne’s office vacancy hovers near 20%, reflecting entrenched hybrid work culture and substantial new supply completions. Nonetheless, its western industrial belt benefits from robust e-commerce activity and manufacturing reshoring, delivering rental growth that outpaces national averages. Western Australia’s revival is tied to commodities expansion and Perth’s emergence as a secondary data-center node serving Indo-Pacific traffic, supported by the state’s relatively low land costs and ample renewable-energy potential. Collectively, these regional dynamics reinforce the structural bifurcation between prime assets in core east-coast locations and higher-yielding opportunities in emerging logistics and digital-infrastructure corridors across the wider Australia commercial real estate market.
Competitive Landscape
Australia’s commercial property arena exhibits moderate concentration, with the top five A-REITs controlling close to 55% of listed market capitalization. Goodman Group, which holds a 41.7% weighting in the S&P/ASX 200 A-REIT index, leverages a USD 55.1 billion global portfolio heavily skewed toward logistics and data-center developments, and achieved 15% profit growth in FY 2024[3]Australian Securities Exchange, “ASX 200 Property Trusts Index Methodology,” Australian Securities Exchange, asx.com.au. Dexus manages USD 38.2 billion in domestic assets and maintains occupancy above 94% across office and industrial holdings through proactive lease renewals and capital recycling strategies. These leaders continue to access competitively priced debt, sustaining development pipelines even as financing conditions tighten.
Competition is intensifying as international capital flows into niche segments. Blackstone’s USD 16.8 billion acquisition of AirTrunk underscores growing demand for hyperscale data-center exposure. Domestic REITs respond by forming joint ventures with sovereign funds to scale faster and share construction risk in technology-heavy projects. Simultaneously, mid-tier players such as Centuria focus on specialized industrial REIT vehicles targeting last-mile warehouses in undersupplied sub-markets, exploiting local development expertise to gain yield premiums.
Technology deployment and ESG leadership are emerging as decisive differentiators. Market leaders integrate PropTech solutions for real-time energy tracking, predictive maintenance, and tenant-experience applications, enhancing operational efficiency and retention rates. Sustainable finance instruments, including green bonds issued by Lendlease and Charter Hall, lower funding costs for certified developments and reinforce reputational standing with institutional investors. As hybrid work patterns redefine occupier priorities, landlords that offer adaptable floorplates, health-certified environments, and digital connectivity are best placed to capture evolving demand within the Australia commercial real estate market.
Australia Commercial Real Estate Industry Leaders
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Dexus
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Goodman Group
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GPT Group
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Charter Hall Group
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Mirvac Group
- *Disclaimer: Major Players sorted in no particular order

Recent Industry Developments
- February 2025: Scentre Group delivered USD 397 million Funds From Operations for H1 2024, with 99.3% portfolio occupancy and a USD 2.24 billion development pipeline.
- November 2024: Scentre Group recorded 429 million customer visits across its Westfield centers, up 2.1% year-on-year.
- October 2024: CIMIC Group accelerated data-center construction capabilities, targeting an additional 1,500 MW national capacity by 2030.
- September 2024: Blackstone agreed to acquire AirTrunk for USD 16.8 billion, underscoring global appetite for Australian digital-infrastructure assets.
Australia Commercial Real Estate Market Report Scope
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.
Australia's commercial real estate market 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 Property Type | Offices |
Retail | |
Logistics | |
Others (industrial real estate, hospitality real estate, etc.) | |
By Business Model | Sales |
Rental | |
By End-user | Individuals / Households |
Corporates & SMEs | |
Others | |
By Region | New South Wales |
Victoria | |
Queensland | |
Western Australia | |
South Australia | |
Australian Capital Territory | |
Tasmania | |
Northern Territory |
Offices |
Retail |
Logistics |
Others (industrial real estate, hospitality real estate, etc.) |
Sales |
Rental |
Individuals / Households |
Corporates & SMEs |
Others |
New South Wales |
Victoria |
Queensland |
Western Australia |
South Australia |
Australian Capital Territory |
Tasmania |
Northern Territory |
Key Questions Answered in the Report
What is the current value of the Australia commercial real estate market?
The market is valued at USD 52.33 billion in 2025 and is projected to reach USD 67.81 billion by 2030.
Which property type holds the largest share?
Office assets lead with a 31% revenue share in 2024, although logistics assets demonstrate the fastest growth.
Why are logistics facilities expanding faster than offices?
E-commerce growth, supply-chain onshoring, and automation requirements have reduced vacancy to around 1%, pushing rents higher and spurring new warehouse development.
Which region is growing the quickest?
Queensland posts the fastest CAGR at 5.96% through 2030, supported by Olympic infrastructure projects and expanding logistics corridors.
How is hybrid work influencing office demand?
Regular remote work by 36% of employees is curbing net absorption and elevating vacancy, prompting occupiers to consolidate into premium, amenity-rich buildings.
What role does ESG compliance play in property values?
Certified green buildings command rental premiums and attract institutional capital, especially as mandatory climate-disclosure rules take effect from 2025.