Insights H1 2025
2 | Insights H1 2025 Welcome 03 At a Glance - Key Market Drivers 04 Arealytics 06 Australia Outlook 08 National Auction Event 10 Leasing Solutions 11 Australian Capital Territory 12 New South Wales 14 Queensland 38 South Australia 49 Tasmania 52 Victoria 54 Western Australia 56 National & International Strength 58 Contents Disclaimer: Information contained herein has been gathered from sources we deem to be reliable however warrant no guarantees as to accuracy. Readers are encouraged to rely upon their own due diligence and enquiries. All rights reserved.
Insights H1 2025 | 3 As the start of 2025, persistently weaker inflation suggests this is the year Australia will celebrate lower interest rates. When rate cuts happen – and economists appear to agree that we can expect several consecutive cuts – a number of investment markets will benefit, including commercial property. While the industrial property market has proven exceptionally resilient through, and following, the COVID pandemic, the office and retail sectors have lagged behind in a number of locations. However, this is set to change. Rate cuts are expected to boost retail spending. Additionally, ‘return to office’ mandates among employers, will drive office markets higher while supporting surrounding retail precincts. More broadly, we are seeing investors and owner occupiers focus on quality properties – buildings that don’t just have strong nearby transport links, but which also tick the boxes for energy efficiency and an abundance of amenities that make commercial spaces more engaging places to work. Welcome to our H1 2025 Insights Angus Raine Executive Chairman Raine & Horne Group In this edition of Commercial Insights, we travel around Australia to see how markets are shaping up, how business and investor sentiment is evolving, and why the current market offers plenty of opportunities for commercial property owners thinking of selling their asset. If you have any queries in regards to the commercial market, I encourage you to contact one of Raine & Horne’s experienced property experts for a greater understanding of prices, yields and market supply in your preferred area. Chris Nicholl Chief Executive Officer Raine & Horne Group
4 | Insights H1 2025 At a glance: Key market drivers Chris Nicholl, CEO of Raine & Horne, sums up the key factors shaping today’s commercial property market. Predicted cuts to interest rates With inflation now consistently heading lower and within the Reserve Bank’s target zone, it is increasingly a question of ‘when’ not ‘if’ rates will start to fall. Financial markets anticipate those much-awaited rate cuts will arrive this year. This will provide a tremendous flip for the commercial property market – particularly the retail sector, which has been a noteworthy victim of Australia’s cost of living crunch.
Insights H1 2025 | 5 Industrial market continues to shine The industrial property market continues to be a highly soughtafter asset class. A focus on residential housing development and still-high construction costs are capping the supply of new industrial precincts, driving values higher. Weaker inflation and forecast rate cuts will have a flow-on effect on the industrial market as consumer spending rises. Return to office mandates gain traction The office market, which was arguably up-ended by pandemicera lockdowns, has taken time to recover. However, the push to get teams back in the office is accelerating as the appetite of businesses to support across-theboard remote working has declined. A strong labour market in Australia, especially for white collar jobs, also bodes well for office demand. This new shift in workforce patterns will support both the office market and surrounding retail markets. Tenants and buyers seek quality Well-funded owner-occupiers continue to take advantage of the benefits of property ownership, driving demand in many markets. These buyers are seizing opportunities in softening markets, unphased by potential vacancies or investment returns.
6 | Insights H1 2025 We are pleased to share that Raine & Horne Commercial has partnered with Arealytics, Australia’s most comprehensive commercial property data platform. Through this collaboration, this edition of Insights offers additional micro-market analysis using this data in many of our markets. By leveraging Arealytics’ comprehensive data, we can benchmark regional performance against larger metro-city trends and provide actionable insights for the vendors, buyers, investors, and small-medium business owners we proudly serve. Arealytics: Transforming Commercial Real Estate Through Comprehensive Data and Insight Arealytics provides the most comprehensive and proactively maintained commercial real estate (CRE) data available in Australia. Our mission is to empower the industry with unparalleled insights, enabling professionals to make informed decisions, streamline operations, and drive success. Cutting-Edge Data and Technology Arealytics leverages best-in-class proactive data collection, machine learning, and artificial intelligence to provide an extensive range of CRE data solutions. Our robust, real-time ecosystem supports every stage of the transaction lifecycle for leases and sales activities, ensuring professionals have the tools to navigate today’s competitive landscape effectively. Comprehensive Data Solutions Our end-to-end solutions cover the entirety of CRE properties in global markets and provide actionable insights at every level—from individual buildings to market-wide analysis. Expanding to Serve You Better Currently operating in Sydney, Melbourne, and Southeast Queensland, Arealytics will expand into Perth, Adelaide, and Canberra in 2025. This growth cements our position as the leading provider of CRE insights across Australia, enabling even more professionals to access the tools they need to succeed. Raine & Horne partner with advanced real estate analytics provider Arealytics
Insights H1 2025 | 7 Arealytics provide a meticulously curated suite of data, including: Property Records Hundreds of researched, standardised data points for all commercial properties, including gross building area, use type, and construction details. Ownership Data Identification of true property owners, offering a complete portfolio view across markets. Listings Comprehensive market listings in real-time, enabling calculation of vacancies across the total property universe. Tenant Information A detailed directory of tenants, including their industry, contact details, and physical space usage. Lease Transactions Market-wide tracking of lease activity, including start and expiry dates, terms, and transaction details. Sales Transactions Verified insights into buyers, sellers, and financial details, mapping capital flows within the market. Certified Analytics Advanced tools for market-wide or geographically specific analysis of historical trends with key data validated by local Advisory Boards.
8 | Insights H1 2025 Other key observations include: • The shape of the recovery in Australia’s capital markets from here will be hugely dependent on the path of inflation, interest rates and GDP growth • The combination of some easing in monetary policy this year, slowing inflationary pressures, and attractive commercial real estate pricing should make 2025-26 a healthy vintage for market entry, consistent with prior cycles • Cap rates have expanded sharply across most sectors and markets, creating better entry points for new capital, including higher yields for recently completed developments • Elevated construction costs and tight labour markets are likely to continue impacting new development activity which should be supportive of rental growth and cashflows as the demand cycle recovers over the medium term. Australia’s commercial property market turns a corner in 2024 This recovery sets the stage for a healthy 2025-26, says Macquarie Asset Management. Australia’s commercial property transactions in core sectors lifted strongly in 2024, with overall sales rising in excess of 10%. Following declines in the previous two years, this suggests improving sentiment towards the asset class.
Insights H1 2025 | 9 Improved fundraising, strong fundamentals and US tariffs to drive growth in select markets Commercial real estate fundraising should improve as the year progresses, with investors becoming more comfortable that valuations have bottomed out, supported by thawing credit conditions and easing monetary policy. The pullback in starts that we have seen to likely to amplify housing shortages over the medium term. On the demand side, stretched purchase affordability and demographic shifts are forcing households to rent for longer which is likely to keep rents and occupancy rates high. Logistics and residential sectors continue to see strong fundamentals and returns across cities. In the office space, elevated incentives and vacancy rates continue to impact income returns but net absorption as a proxy for tenant demand has lifted in Sydney’s CBD market with many occupiers focused on prime buildings in core locations. Finally, rising US tariffs may have further impacts on global supply chains and trade flows, benefitting industrial / logistics properties in selective markets.
10 | Insights H1 2025 After three events, the Raine & Horne Commercial National Auctions have generated over $110 million and gained national media attention. This impressive collection of industrial, office and retail properties reflect a significant presence in local markets and the power of Raine & Horne Commercial’s collaborative national network. The next National Auction Event: Thursday March 20th, 2025 10:30 am AEST. $110m+ Generated in sales 1,000+ Registered attendees 315,000+ Impressions 10,000 Active users to the Auction page Scan the QR code for information on these outstanding properties and register your interest. We look forward to seeing you online or in rooms. National Auction Event yields sales of over $110 million
Insights H1 2025 | 11 Following the successful launch of our National Auction Event series, Raine & Horne Commercial proudly presents its latest special offering: Leasing Solutions. This curated collection is crafted to cater to small and medium businesses seeking top-tier industrial and office locations. It showcases an array of outstanding properties across Australia’s key markets. Leasing Solutions is made possible by Raine & Horne Commercial’s robust local market relationships and extensive geographic coverage. These ensure that our clients have access to the best properties in prime locations across the country. 1 million Impressions 5,000 Clicks National Media coverage Scan the QR code to view the Leasing Solutions properties currently available. “Leasing Solutions leverages Raine & Horne Commercial’s strong local market relationships and expansive geographic coverage to help Australian small and medium-sized enterprises (SMEs) grow,” says Chris Nicholl, Network Head of Raine & Horne Commercial. “This initiative benefits our landlords and empowers potential lessees by making these prime properties more accessible than ever.” Leasing solutions
Australian Capital Territory 12 | Insights H1 2025
Insights H1 2025 | 13 Mark Nicholls of Commercial Canberra says the increase in the stamp duty-free threshold from $1.8 million to $1.9 million for commercial property purchases in the ACT has helped to drive interest from interstate investors as well as local buyers. Enquiry levels remain strong for tenanted assets especially those with long term leases and secure tenant covenants. The industrial market remains driven by a limited supply of standalone sheds and zoned industrial land. A large supply of newly completed strata-titled units in Hume has resulted in a softening of this sub-sector. In the office market, B & C grade walk-up space with no common area end-of-trip facilities struggle to lease, especially if landlords don’t match incentives offered by institution-owned buildings. The construction of Stage 2 of the ACT Light Rail has now commenced. Mark says, “This will deliver a convenient and environmentally-friendly transport option from Canberra CBD to South Canberra, providing improved access to many workplaces, retail centres and education facilities, and further support the ACT’s commercial property market.” Canberra Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $350-$600 $180-$350 $400-$950 Vacancy 9.5% 2-4% n/a Yields 6-7.5% 5-6.5% 5.5-7% Rates p/m² $4,000-$6,000 $3,000-$4,500 $6,000-$12,000 Current market conditions $5,731,400 8 Yallourn Street, Fyshwick Recent Notable Transactions SOLD $2,900,000 7 Kembla Street, Fyshwick SOLD Mark Nicholls mark.nicholls@canberra.rhc.com.au
New South Wales 14 | Insights H1 2025
Insights H1 2025 | 15
16 | Insights H1 2025 Mark Ammoun of Commercial Bankstown says the commercial property markets of South West and Western Sydney are experiencing notable inconsistencies. “While some highly desirable – primarily freestanding – assets are performing exceptionally well due to high demand from owner occupiers, other properties are struggling to attract interest,” says Mark. Owner occupiers continue to be the main driver of demand for high quality assets. And, amid the market’s variability, assets perceived to be ‘quality’ properties, notably those that are welllocated and freestanding, often generate significant competition, with multiple buyers showing interest in them. By contrast, less desirable properties are finding it difficult to gain traction. Mark says this indicates a clear divide across the market. Interest rates remain a dominant factor affecting economic conditions and property prices. “While interest rates are not expected to rise in the near future, the uncertainty surrounding them is causing businesses and investors to adopt a cautious wait-and-see approach,” Mark says. “This is contributing to the ongoing inconsistency in the market’s performance.” Mark Ammoun m.ammoun@rhc.com.au Bankstown Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $250-$320 $200-$300 $400-$900 Vacancy 8-10% 1.5% 9% Yields 7-8% 4-5% 8% Rates p/m² $3,000-$6,000 $4,000-$7,000 $5,500-$13,000 Current market conditions $265,000 30 Regent Crescent, Moorebank Recent Notable Transactions LEASED $530,000 34-36 Lisbon Street, Fairfield East LEASED
169 Leases commence June to December 2024 652 sqm Average lease size commenced Office 3,517 sqm Average lease size commenced Industrial $113,216 Average starting rates annually Office $353,013 Average starting rates annually Industrial $49,991 Average starting rates annually Retail $395 Average starting rates per sqm Office $495 Average starting rates per sqm Industrial Source: Arealytics Bankstown Market Data Insights H1 2025 | 17
18 | Insights H1 2025 Luke Smith of Commercial Inner West/South Sydney says the industrial property market in Sydney’s Inner West continues to demonstrate remarkable strength, as evidenced by the recent sale of 6-10 Rich Street, Marrickville, which set a new benchmark for 2024 with a sale value of $24 million. This 3,654 sqm site, boasting dual street frontage and high clearance warehousing, attracted widespread interest from a diverse range of buyers, The sale process, conducted via Expressions of Interest, generated 124 buyer enquiries and multiple offers, with an owneroccupier ultimately securing the property. The sale underscores the ongoing demand for high quality industrial properties in Marrickville, a suburb that has become a hub of activity due to its revitalised amenities and accessibility. More broadly, Luke notes that when small businesses are optimistic about growth, “we see increased demand for industrial and commercial properties as they look to expand or secure strategic locations. In Marrickville, the vibrant local economy and strong business confidence consistently drive competition, pushing both leasing and sales activity to new heights.” Inner West | South Sydney Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $450-$700 $250-$450 $550-$1,000 Vacancy 5% 3% 5% Yields 4-5% 3.5-4.5% 4-50% Rates p/m² $8,500-$12,000 $7,000-$11,000 $8,500-$12,000 Current market conditions $24,000,000 6-10 Rich Street, Marrickville Recent Notable Transactions SOLD SOLD $11,100,000 13 Barclay Street, Marrickville For more information, contact: Nicholas Smith nsmith@rhcss.com.au Luke Smith lsmith@rhcss.com.au
130 Leases commence June to December 2024 457 sqm Average lease size commenced Office 1049 sqm Average lease size commenced Retail $108,920 Average starting rates annually Office $159,235 Average starting rates annually Industrial $32,067 Average starting rates annually Retail $959 Average starting rates per sqm Office $823 Average starting rates per sqm Industrial Source: Arealytics Inner West | South Sydney Market Data Insights H1 2025 | 19
20 | Insights H1 2025 Vincent Stevens of Commercial Liverpool says the local market remains active across all sectors, with demand especially strong for well-located properties. The investor market has slowed slightly, reflecting higher financing costs, and this has seen owner occupiers come to the fore as the key drivers of demand for commercial property across Liverpool. That said, data from Arealytics shows 114 new commercial leases were signed in the second half of 2024. More broadly, the Liverpool area is rapidly becoming a health and education hub. Vincent explains, “Liverpool CBD has recently been the beneficiary of a number of large office lease transactions, with universities being the key lessees as they look to expand their footprint into Western Sydney.” Wollongong University, Notre Dame University and Western Sydney University are among the tertiary institutions that now have campuses in Liverpool, and this will underpin the long term health of the local economy, and cement the appeal of the area’s commercial property market. Vincent Stevens vincent.stevens@rhc.com.au Liverpool Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $350-$400 $200-$250 $550-$750 Vacancy >5% 1% <5% Yields 7% 6.5% 6% Rates p/m² $5,500-$6,000 $4,500-$5,000 $10,000 Current market conditions $5,136,000 + GST 2 White Cliffs Avenue, Gregory Hills Recent Notable Transactions SOLD $135,000 p.a. Net + GST 3/395-399 Hume Highway, Liverpool LEASED For more information, contact:
114 Leases commence June to December 2024 1,391 sqm Average lease size commenced Office 2,613 sqm Average lease size commenced Industrial $114,983 Average starting rates annually Office $280,555 Average starting rates annually Industrial $79,226 Average starting rates annually Retail $550 Average starting rates per sqm Office $758 Average starting rates per sqm Industrial Source: Arealytics Liverpool Market Data Insights H1 2025 | 21
22 | Insights H1 2025 Daniel Krobot of Commercial Macarthur says South Western Sydney has seen a slowing in demand for sale and lease transactions across all market sectors. “It is noticeable that all transactions are taking significantly more time and effort to put together and finalise,” says Daniel. “Despite this we have not seen a significant decline in property values for sale, and lease values remain steady.” Daniel adds that sentiment varies in line with the type of business, but it is generally “one of caution and belt tightening.” Daniel Krobot daniel.krobot@rhc.com.au Macarthur Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $300-$450 $170-$220 $400-$600 Vacancy 5% 2% 5% Yields 6% 6% 6% Rates p/m² $7,500-$8,500 $3,800-$5,000 $8,000 Current market conditions $900,000 9-13 Kialba Road, Campbelltown Recent Notable Transactions SOLD $3,900,000 Unit 3, 1 Reaghs Farm Road, Minto SOLD
63 Leases commence June to December 2024 770 sqm Average lease size commenced Office 3,801 sqm Average lease size commenced Industrial $135,369 Average starting rates annually Office $479,486 Average starting rates annually Industrial $30,764 Average starting rates annually Retail $445 Average starting rates per sqm Office $249 Average starting rates per sqm Industrial Source: Arealytics Macarthur Market Data Insights H1 2025 | 23
24 | Insights H1 2025 Christian Cirillo from Commercial Parramatta says, “As the rhetoric of lower interest rates continues, so does increased activity within Parramatta’s commercial market both in sales and leasing enquiry.” He adds that this is creating much needed momentum coming into 2025, putting the market in good stead to capitalise on the completion of around $20 billion worth of infrastructure projects with around $10 billion yet to be finished. Data from Arealytics shows 158 new leases were signed in the second half of 2024 though current office leasing conditions and vacancy rates are soft. Commercial Parramatta’s Duarte Figueira says, “We believe this will change in the second half of 2025 as demand will pick up off the back of tenants wanting to capitalise on some of the best rent incentives (up to 40% net) to be seen in years.” Christian Cirillo adds, “Retail has seen a surge in leasing activity as most tenant migration seen recently occurred off the back of tenants chasing better rent deals, in many cases relocating within close proximity.” Parramatta Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $300-$750 $180-$220 $400-$1,200 Vacancy 28% 5% 10% Yields 6-6.5% 5-5.5% 6-6.5% Rates p/m² $4,500-$12,000 $4,500-$6,000 $8,000-$12,000 Current market conditions 4.01% New Yield 248 Victoria Road, Gladesville Recent Notable Transactions SOLD $5,650 p/sqm + GST 98 Victoria Road, Parramatta SOLD For more information, contact: Duarte Figueira dfigueira@rhc.com.au Christian Cirillo ccirillo@rhc.com.au
158 Leases commence June to December 2024 367 sqm Average lease size commenced Office 6,389 sqm Average lease size commenced Industrial 50 Average lease size commenced Retail $173,419 Average starting rates annually Office $640,460 Average starting rates annually Industrial $87,672 Average starting rates annually Retail $677 Average starting rates per sqm Office Source: Arealytics Parramatta Market Data $545 Average starting rates per sqm Industrial $471 Average starting rates per sqm Retail Insights H1 2025 | 25
26 | Insights H1 2025 John Henry of Commercial Penrith says recent sales demonstrate strong rates being achieved in the area, with a ground-floor office selling for $6,031 per sqm, and a strata industrial unit in nearby Emu Plains fetching $4,814 per sqm, setting a new record for the complex. “The industrial property market, which showed resilience during the pandemic, has showed signs of stabilisation,” says John. “Factors such as increased interest rates, challenges in the construction sector, and declining consumer confidence are impacting the market.” However, John adds that industrial space remains undersupplied, with rising construction costs and delays continuing to limit new supply. “There is also growing demand for smaller industrial facilities,” he notes. Looking ahead, John says local small business significantly impacts leasing and sales transactions by influencing demand. “When small businesses are operating well, they are more likely to expand, leading to increased demand for space and favourable leasing terms,” notes John. “Equally, negative sentiment can cause businesses to downsize, or close, reducing demand and prompting landlords to offer concessions or lower rents.” Penrith Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $350-$400 $175-$220 $600 Vacancy 10-15% <5% <5% Yields <7.5% 4.5-5% 5.5-6% Rates p/m² $6,000 $4,000-$5,000 $8,000-$10,000 Current market conditions $860,000 40 Nineteenth Street, Warragamba Recent Notable Transactions SOLD $320,000 p.a. + GST 37 Bromley Road, Emu Plains LEASED John Henry john.henry@rhc.com.au For more information, contact:
53 Leases commence June to December 2024 n/a Average lease size commenced Office 12,803 sqm Average lease size commenced Industrial $70,870 Average starting rates annually Office $192,872 Average starting rates annually Industrial $66,500 Average starting rates annually Retail $390 Average starting rates per sqm Office 194 Average starting rates per sqm Industrial Source: Arealytics Penrith Market Data Insights H1 2025 | 27
28 | Insights H1 2025 Anthony Bouteris of Commercial Sutherland Shire says investors are active in the market, but are typically seeking assets generating yields of at least 6% – and this is happening across all sectors of the commercial market. “Owner occupiers are still driving the industrial market,” says Anthony. “This is seeing rates per metre remain steady, partly because of bank funding.” In the industrial market, owner occupiers are chiefly from the building and construction sector though Anthony adds that other buyers from industries are “paying good money” for warehouse assets that can be used for storage purposes. Leasing activity remains strong, with Arealytics data indicating 109 new leases were signed for commercial properties in the second half of 2024. The Sutherland Shire has also seen a broad uptick in interest for residential development sites, with local developers eagerly looking for suitable sites to take advantage of the state government’s push for more residential housing. Anthony Bouteris anthony@rhmiranda.com.au Sutherland Shire Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $300-$350 $250-$300 $500-$1,100 Vacancy 1% 1% 6-7% Yields 6-7% 5-6% 6-7% Rates p/m² $7,000-$11,000 $6,000-$8,500 $8,000-$17,000 Current market conditions $2,050,000 87 Cawarra Road, Caringbah Recent Notable Transactions SOLD $600,000 3 & 4/341 Rocky Point Road, Sans Souci SOLD
109 Leases commence June to December 2024 150 sqm Average lease size commenced Office 1,629 sqm Average lease size commenced Industrial $58,777 Average starting rates annually Office $164,651 Average starting rates annually Industrial $27,532 Average starting rates annually Retail $685 Average starting rates per sqm Office $341 Average starting rates per sqm Industrial Source: Arealytics Sutherland Shire Market Data Insights H1 2025 | 29
30 | Insights H1 2025 Chris Nicholl of Commercial Sydney, says as property markets return to growth, core assets in Sydney’s CBD are likely to lead the way, enjoying sustained tenant demand and lower vacancy rates. This will likely be driven, in part, by the sheer weight of global capital invested in Australia’s largest property market. While Chris sees good news ahead for core assets, secondary offices are expected to face continuing headwinds. With interest rates likely to remain higher for longer, the cost to reposition older assets will remain a challenge. That said, failing to improve an asset’s visual appeal, services performance and ESG credentials will likely result in lower rents and/or higher vacancies in the medium term. Despite these challenges, Chris says, “We envisage secondary buildings that are well-situated relative to public transport and amenity will increasingly be of interest to investors who have the financial capacity to reposition such assets to cater to demand for high quality assets.” More broadly, Chris points to Arealytics data showing 253 leases were taken up in the Sydney CBD in the second half of 2024, highlighting the overall good health of the commercial market. Sydney CBD Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $450-$2,200 n/a $500-$2,000 Vacancy 11% n/a 8% Yields 6-7.25% n/a 5.75-8.75% Rates p/m² $8,000-$30,000 n/a $7,500-$30,000 Current market conditions Price Confidential 97-99 Bathurst Street, Sydney Recent Notable Transactions LEASED Price Confidential 50 Margaret Street, Sydney LEASED Chris Nicholl chris.nicholl@sydneycbd.rhc.com.au For more information, contact:
253 Leases commence June to December 2024 688 sqm Average lease size commenced Office 387 sqm Average lease size commenced Retail $861,056 Average starting rates annually Office $1,308,252 Average starting rates annually Retail $1,307 Average starting rates per sqm Office $5,035 Average starting rates per sqm Retail Source: Arealytics Sydney CBD Market Data Insights H1 2025 | 31
32 | Insights H1 2025 Geoff Tilden of Commercial Central Coast says demand is strong for smaller office spaces of around 50 sqm as home-based businesses relocate to bigger spaces. He notes, “This market is continuing to grow especially for high quality assets.” In the industrial market, Geoff says sales and leasing activity is especially robust in the West Gosford area. Raine & Horne Commercial Central Coast recently sold 354 Manns Road, West Gosford for a record rate per square metre of $648 plus GST. According to Geoff, the sale reflects buyers’ willingness to pay above-market rates for high quality properties. In the leasing market, a hotly contested industrial property at 258 Manns Road, West Gosford, was leased for $90,000 per annum net. The retail market across the Central Coast is still quiet though Geoff notes that quality investment properties continue to achieve strong results. As a guide, the sale of 45 Brisbane Waters Drive, Gosford, which sold at auction on a yield of 5.5%, suggests that demand is rising away from the Gosford CBD. The completion of a number of new apartment developments in Gosford is likely to stimulate demand for retail space in the area. Geoff Tilden geoff.tilden@gosford.rh.com.au Central Coast Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$600 $150-$350 $300-$400 Vacancy 8-10% 10% 15% + Yields 5-6% 6-7% 6-7% Rates p/m² $4,000-$6,000 $4,000-$5,000 $4,000-$6,000 Current market conditions $90,000 p.a. + Net 258 Manns Road, West Gosford Recent Notable Transactions LEASED $3,100,000 354 Manns Road, West Gosford SOLD
Insights H1 2025 | 33 Joe Burgun of Commercial Dubbo says owner occupiers are continuing to drive the local market with investors cautiously watching yields, and waiting for expected interest rate falls in 2025. “We are seeing astute and experienced investors confidently seize opportunities in a softer market before potential interest rate cuts increase competition,” notes Joe. The retail and office sectors, especially in prime locations, have shown unexpected resilience. However, Joe says the industrial market remains the best performer, driven by a scarcity of standalone warehouses. Rising land costs and limited releases of industrial-zoned land have further contributed to elevated property values in Dubbo’s industrial property market. Joe adds, “Investors are increasingly focusing on alternative assets such as fast food retail, childcare centres and medical facilities, which are becoming mainstream commercial assets due to strong occupancy rates and yields comparable to traditional asset types.” Joe Burgun joe@rhdubbo.com.au Dubbo Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$400 $75-$200 $200-$700 Vacancy 5-8% <5% 5-8% Yields 5-8% 5.5-6.5% 5-8% Rates p/m² $2,000-$4,000 $1,000-$3,000 $2,500-$5,000 Current market conditions $2,050,000 82-86 Erskine Street, Dubbo Recent Notable Transactions SOLD $758,000 2/1 Commercial Avenue, Dubbo SOLD
34 | Insights H1 2025 Brad Wallace of Commercial Newcastle explains that 2024 has been another eventful year for commercial property across the Newcastle and Greater Hunter markets. “It has been filled with conflicting drivers that have pushed and pulled property values and market activity,” says Brad. “In 2025, it is likely that we will start to see more transactional activity.” At the lower market tiers (such as convenience and neighbourhood centres), Brad says there is still a high level of buyer demand for quality assets. Yield softening has not been as pronounced. However, there have been low levels of stock availability. “We saw a heady amount of activity across our industry right through to the holiday period,” notes Brad. “There appears to be an appetite among commercial property investors and owner occupiers to maintain the momentum, which makes me optimistic about 2025’s commercial property sector and the economy.” Brad Wallace brad.wallace@newcastle.rh.com.au Newcastle Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$500 $140-$225 $200-$500 Vacancy 15% <4% 15% Yields 7-8% 6-8% 7-8% Rates p/m² $4,000-$9,000 $2,000-$3,500 $3,000-$4,000 Current market conditions $1,750,000 70-78 Oxford Street, Gateshead Recent Notable Transactions SOLD $840,000 4/3 Ranton Street, Cardiff SOLD
Insights H1 2025 | 35 Luke Horton of Commercial Port Macquarie says commercial property sales and lease enquiries remain strong. “We are a rapidly growing regional centre, which has helped maintain strong demand, amid limited supply.” According to Luke, interest rates have affected most buyers’ affordability, and this has placed some downward pressure on sale price expectations “from what the asset is worth to what a buyer can afford”. However, he adds that many vendors are agreeing to meet the market to be able to move forward with a sale. This enables these vendors to proceed with their own commercial property plans. Graeme Garrett ggarrett@rhcpmq.com.au Port Macquarie Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $400 $150 $450-$750 Vacancy 10% 10% 15% Yields 7% 6% 6.5% Rates p/m² $4,500 $2,500-$3,000 $7,000-$10,000 Current market conditions $3,150,000 144 Lake Road, Port Macquarie Recent Notable Transactions SOLD $2,050,000 Unit 4/1 Chestnut Road, Port Macquarie SOLD Luke Horton lhorton@rhcpmq.com.au For more information, contact:
36 | Insights H1 2025 Craig Tait of Commercial Wagga Wagga says the commercial market is holding strong and being supported by major local infrastructure projects. The Riverina Intermodal Freight and Logistics Hub, for instance, will provide large lot industrial land for manufacturing and logistics businesses. The Energy Connect project is set to generate 1,500 jobs across regional NSW – and Wagga Wagga is central to the project’s completion. The Department of Defence Riverina Redevelopment Program will provide $1 billion worth of new or upgraded facilities across the region over the next five years. Craig believes Wagga Wagga is set to benefit immensely from these projects. “We anticipate a major positive impact on the commercial market in Wagga Wagga,” says Craig. “Already we’ve seen a huge increase in demand for industrial stock, and this is likely to spread to retail and office assets as the projects ramp up.” According to Craig, confidence is still high in the Wagga market, and sales of commercial assets are well supported by the lack of available stock currently listed. Craig Tait craig.tait@wagga.rh.com.au Wagga Wagga Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $250-$450 $90-$160 $300-$550 Vacancy 10% 3% 5% Yields 6.5-7.5% 6.5-7.5% 6-7% Rates p/m² $250-$450 $90-$160 $300-$550 Current market conditions $10,300,000 39 Dobney Avenue, Wagga Wagga Recent Notable Transactions SOLD $85,000 p.a. + GST 34 Schiller Street, Wagga Wagga LEASED For more information, contact:
Insights H1 2025 | 37 Mathew Ivanoff of Commercial Wollongong says he is seeing a degree of caution across both the sales and leasing markets. On the plus side, the industrial market has seen a slight decline in rates in the last quarter, which may add value for buyers and tenants. Mathew said calls for the State and Federal Governments to jointly fund a business case for the Macarthur-Kembla Link, a dual-track freight and passenger rail line to connect to Port Kembla into the Western Sydney Aerotropolis, could be a game-changer. “Any strategies that strengthen the connections between the Illawarra and rapidly expanding Western Sydney would create significant economic opportunities and benefit both local commercial and residential property markets.” Mathew Ivanoff mathew@rhw.com.au Wollongong Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $350-$350 $250-$300 $450 Vacancy 12% 1.5% 7% Yields 7.5-8% 6% 4% Rates p/m² $6,500 $1,350 $7,000 Current market conditions $2,170,000 247 Nolan Street, Unanderra Recent Notable Transactions SOLD $540,000 p.a. + GST B/25 York Place, Woonona LEASED
Queensland 38 | Insights H1 2025
Insights H1 2025 | 39
40 | Insights H1 2025 Trent Bruce of Commercial Brisbane North says the city’s commercial property market is expected to gain significant momentum in 2025 as Brisbane prepares for the 2032 Olympic Games. The anticipated influx of investment and development is linked to Olympic-related infrastructure projects, with key developments such as the Brisbane Live entertainment precinct, and improved transport links such as the Cross River Rail and Brisbane Metro all enhancing the city’s appeal as a commercial and business hub. Demand for office spaces is likely to remain steady though targeted, with businesses favouring high-quality buildings. Retail properties may experience a resurgence as population growth and infrastructure projects enhance accessibility and foot traffic in key precincts. Industrial and logistics properties are again poised for strong performance, driven by e-commerce expansion and Brisbane’s role as a logistics hub. Rising interest rates and construction costs have the potential to temper new developments. Nonetheless, Brisbane’s commercial property sector will likely balance opportunities with challenges, underpinned by its growing economy and strategic position in the Asia-Pacific region. Trent Bruce tbruce@rhcommercial.com Brisbane North Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $300-$400 $150-$250 $450-$600 Vacancy 12% 3% 8% Yields 6.5-7% 5.5-6% 6-6.25% Rates p/m² $5,000-$6,000 $3,000-$4,000 $6,000-$8,000 Current market conditions $2,330,000 272 Newmarket Road, Wilston Recent Notable Transactions SOLD $286,740 p.a. Gross + GST 1 & 2/668 Gympie Road, Lawnton LEASED
534 Leases commence June to December 2024 141 sqm Average lease size commenced Office 402 sqm Average lease size commenced Industrial 89 sqm Average lease size commenced Retail $46,677 Average starting rates annually Office $53,906 Average starting rates annually Industrial $32,065 Average starting rates annually Retail $664 Average starting rates per sqm Office Source: Arealytics Brisbane North Market Data $160 Average starting rates per sqm Industrial $342 Average starting rates per sqm Retail Insights H1 2025 | 41
42 | Insights H1 2025 Joseph Grasso of Commercial Brisbane Southside says the commercial property market across the Brisbane South and the Bayside regions continues to demonstrate remarkable resilience. “Buyers continue to show strong interest, particularly for wellpositioned and versatile properties that offer further development potential or future rental growth, underscoring the strength of the market in these regions,” says Joseph. On the leasing front, data from Arealytics indicates 634 new leases were completed in the second half of 2024. According to Joseph, the sub-1,000 square metre market has been exceptionally tight, with limited availability fueling fierce competition. “Many properties have experienced multiple leasing offers, reflecting the ongoing demand from small to mediumsized businesses seeking to secure space for their next move,” added Joseph. As we move further into 2025, Joseph says the combination of low stock availability and strong tenant demand is expected to sustain the resilience of the Brisbane South and Bayside markets. For both owner occupiers and investors, this continues to present an opportunity to capitalise on the strength of the market and the demand for quality commercial and industrial assets. Nick Comino nick@rnhcommercial.com.au Brisbane Southside Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $180-$250 $130-$175 $400-$550 Vacancy 15% 3% 10% Yields 6.25-7% 5.5-6.25% 5.25-6.25% Rates p/m² $4,000-$5,000 $2,500-$4,250 $5,500-$6,000 Current market conditions $5,800,000 190 Beatty Road, Archerfield Recent Notable Transactions SOLD $160 p/sqm Net p.a. A/580 Transition Drive, Archerfield LEASED For more information, contact: Joseph Grasso joseph@rnhcommercial.com.au
411 Leases commence June to December 2024 126 sqm Average lease size commenced Office 796 sqm Average lease size commenced Industrial 145 sqm Average lease size commenced Retail $34,229 Average starting rates annually Office $64,284 Average starting rates annually Industrial $36,723 Average starting rates annually Retail $334 Average starting rates per sqm Office Source: Arealytics Brisbane Southside Market Data $176 Average starting rates per sqm Industrial $293 Average starting rates per sqm Retail Insights H1 2025 | 43
44 | Insights H1 2025 Michael Parisi of Commercial Gold Coast says the local market remains active, with a low number of quality properties listed amid strong buyer demand. While demand outweighs supply, Michael believes investors are the predominant buyer group, with infrastructure development fueling property growth. While yields on the Gold Coast are expected to remain steady for industrial assets, both office and retail properties are likely to see yields decline. Michael Parisi michael.parisi@rhc.com.au Gold Coast Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $250-$500 $200-$300 $400-$1,200 Vacancy 8% <5% 5% Yields 7% 6% 6% Rates p/m² $3,000 $3,000 $6,000 Current market conditions $300,000 p.a. 3220 Surfers Paradise Boulevard, Gold Coast Recent Notable Transactions LEASED $280,000 p.a. 3197 Surfers Paradise Boulevard, Gold Coast LEASED
393 Leases commence June to December 2024 151 sqm Average lease size commenced Office 1,725 sqm Average lease size commenced Industrial 88 sqm Average lease size commenced Retail $45,166 Average starting rates annually Office $46,902 Average starting rates annually Industrial $39,526 Average starting rates annually Retail $351 Average starting rates per sqm Office Source: Arealytics Gold Coast Market Data $214 Average starting rates per sqm Industrial $371 Average starting rates per sqm Retail Insights H1 2025 | 45
46 | Insights H1 2025 Graham Cockerill of Commercial Hervey Bay reports that the region’s commercial real estate market continues to thrive, driven by ongoing population migration from NSW and Victoria. Notably, the influx from Victoria has been further supported by the launch of three direct flights per week from Melbourne to Hervey Bay, which began in mid-2024. According to Graham, the recent addition of a new Bunnings facility, and the opening of a Spotlight outlet, have significantly boosted retail stock levels in the area. These developments have, in turn, attracted other major retail brands, including AMART, BCF, and SuperCheap Auto, some of which have relocated to the site previously occupied by Bunnings. Fraser Coast Council has approved the development of a largescale Sheraton hotel/apartment on the Hervey Bay Esplanade, which is expected to further stimulate demand for retail space, particularly from new cafés and restaurants. The creation of new jobs helps to drive economic growth and investment, providing a huge boost to nearby businesses. Graham says plenty of investors are looking for commercial properties with a good tenant in place and robust returns. He is also seeing strong levels of enquiries from start-up businesses seeking to lease shops. Graham Cockerill graham.cockerill@herveybay.rh.com.au Hervey Bay Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $240-$400 $165-$185 $250-$350 Vacancy 8% 10% 10% Yields 6.5-7% 7.5-9% 7.5-8% Rates p/m² $4,300 $1,900-$2,000 $2,500 Current market conditions Price Confidential 1/383 Esplanade, Torquay Recent Notable Transactions SOLD Price Confidential 86 Elizabeth Street, Urangan SOLD
Insights H1 2025 | 47 Des Besanko of Commercial Mackay says the market is still seeing strong interest in leased investments, while at the same time, there is good interest from owner occupiers in commercial and industrial buildings. “Local business sentiment is reasonably strong,” says Des. “Skilled labour shortages are restricting business growth and expansion. More broadly, inflationary costs are having an effect on community spending habits.” Mackay continues to benefit from its position as a thriving regional centre, with a population of over 125,000 supporting 55,000 jobs and an annual economic output of almost $22.3 billion. The Mackay region is one of the fastest growing areas of Queensland, with a diverse economy that contributes more GDP per capita to the Queensland Government than any other region in the state. Des Besanko des.b@rhc.com.au Mackay Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $250-$350 $175-$225 $150-$200 Vacancy n/a n/a n/a Yields 7.5-8.5% 6.5-7.5% 7-8% Rates p/m² n/a n/a n/a Current market conditions $3,750,000 14-16 Corporate Drive, Paget Recent Notable Transactions SOLD $3,670,000 17 Brisbane Street, Mackay SOLD
48 | Insights H1 2025 Steve Leaumont of Commercial Townsville says the biggest trend impacting the Townsville market is a shift of investors from residential to commercial properties. This is being driven by two factors – the pursuit of higher yields, and a significant injection of funding into local infrastructure. This has resulted in improved roads and an expansion of commercial opportunities, such as a proposed $550 million waterpark on par with the Gold Coast’s Wet ‘n’ Wild, which is expected to transform Townsville into a major tourism hub. As Steve notes, “The challenge for investors is that listings are tight across all commercial property classes – even on Magnetic Island, prospective investors are struggling to find stock.” The strength of the market represents a great opportunity for investors considering a sale in 2025, says Steve. He notes, “Investors are interested in assets across retail, office and industrial, with industrial representing about 60% of transactions in Townsville.” Steve Leaumont steve.leaumont@townsville.rhc.com.au Townsville Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $180-$280 $160-$200 $250-$350 Vacancy 25% <5% 10-20% Yields 9-10% 7-8% 8-9% Rates p/m² $2,000-$2,500 $1,800-$2,200 $2,700-$3,200 Current market conditions $650,000 36 Camuglia Street, Garbutt Recent Notable Transactions SOLD $23,400 p.a. 20 Echlin Street, West End LEASED For more information, contact:
South Australia Insights H1 2025 | 49
50 | Insights H1 2025 According to Simon Winter of Business Sales SA, business sales are remarkably strong and will remain that way while interest rates are stable. Simon says, “High interest rates ensure investors have a sharper focus on returns and managing their cash flow. Business sales are always the greatest when the lack of return makes investment properties less attractive.” The market suggests that the Reserve Bank may reduce rates in February or April. While a 0.25% rate reduction is likely to attract the investment market’s attention, it will not significantly change its behaviour because investors will want to see what happens next. The trigger point, Simon believes, will come if there is an additional reduction later in 2025. If this occurs, it is likely to accelerate the property market and negatively impact business sales. Commercial sales have remained strong through the current period of higher interest rates, and tenancies have remained stable over the same period. Interestingly, rental yields have remained relatively constant, and there is evidence that they have disconnected from interest rates as demand pushes values higher. As a result, rents are increasing but not as fast as property values. Simon Winter simon.winter@bsa.rh.com.au Business Sales For more information, contact: Price Confidential Keith Sand and Metal, Stirling Road, Keith Recent Notable Transactions SOLD Price Confidential Jagger Fine Foods, Gouger Street, Adelaide SOLD
Insights H1 2025 | 51 Melanie Winter of Commercial Adelaide reports that the industrial market in Adelaide is still strong however the heat seems to be coming off, particularly as the people displaced from acquisitions as a result of the Torrens to Darlington project have been accommodated so that has taken the edge off demand, especially in the inner west. This hasn’t been reflected in a downturn in prices, but enquiry levels are lower, and we are still achieving strong results. We achieved some excellent sales in the lead up to Christmas, with those due to settle in the new year with one standout being an industrial investment selling in excess of $6.5 million representing a yield of sub 5%. Demand for commercial offices and retail remains steady, and investors are still active across all market sectors. Demand from owner occupiers is also still solid, with good enquiry levels. Industrial leasing demand is strong, while demand for office and retail spaces continues to be quite slow. Melanie Winter melanie.winter@bsa.rh.com.au Adelaide Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $250-$450 $95-$220 $200-$1,000 Vacancy 17% <1% <10% Yields 5.5-6.5% 4-5% 5-6% Rates p/m² $5,000-$8,000 $1,500-$2,000 $4,000-$7,500 Current market conditions $2,200,000 524 Brighton Road, Brighton Recent Notable Transactions SOLD $175,000 29a Hindmarsh Avenue, Welland LEASED
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