Through new data, property consultancy CBRE has discovered that commercial property transaction activity is on the rise, with $29.2bn in Australian living sectors, office, retail, industrial and hotel assets changing hands in 2024.
According to CBRE, the preliminary end-of-year total is 21% up on 2023 levels, demonstrating a recovery in the commercial property investment sector.
“Investors are acknowledging the value on offer in various sectors of Australia’s real estate market. Pricing seems to have stabilised after a period of yield softening. Additionally, many existing assets are selling significantly below replacement cost, underscoring the value proposition.”
Tom Broderick, Australian Head of Capital Markets Research, CBRE
The office sector has regained its status as the most traded commercial property sector after achieving $8.4bn in transactions – up 56% y-o-y.
CBRE found that offshore buyers were most active in the office sector, given the deep discounts on offer compared to peak pricing and replacement costs.
Living was the next most favoured sector, following several major Build to Rent and student accommodation transactions, including the Ontario Teachers’ Pension Plan and Hines acquisition of the Arklife Build to Rent Portfolio.
Retail also rebounded strongly, with $7.3bn in assets changing hands, up 34% y-o-y. Industrial & Logistics was in third position with $7.1bn in transactions (+14%), followed by the fast-growing living sector, with $4.8bn in deals (+6%), CBRE state.
However, hotels was the only sector where transactions declined, with $1.6bn in assets traded, compared to $2.5bn in 2023.
“Australia has proven to be one of the more liquid markets in Asia Pacific with price corrections showing genuine value, which is hard to find in developed markets across the region.
“Australia’s stability and transparency is a key drawcard, as is our strong population growth, which is driving demand for real estate.”
Flint Davidson, Pacific Head of Capital Markets, CBRE
By country, the United States became the top source of overseas investment in 2024, accounting for $3.6bn in deals – more than double last year’s investment.
Japanese investors dropped to second place, but remained active, with $1.9bn in acquisitions (-9% y-o-y), while Singaporean investors accounted for deals totaling c $1bn.
