Property consultancy Savills has released its ‘Australian Commercial Real Estate Markets: Spotlight on 2026’ report, which breaks down the three predictions for Australian real estate this year.
Liquidity surge
Savills believes that institutional redemptions will unlock new liquidity and deal flow. A wave of redemption events from unlisted wholesale and super-fund-backed vehicles will drive a marked increase in selective asset disposals.
Unlike previous cycles, these redemptions will be managed proactively, using secondary sales, joint ventures, and recapitalisations. This will create targeted opportunities for offshore capital, especially in gateway cities, and support a more fluid transaction environment.
Prime divide
Prime asset demand will intensify, widening the gap with secondary stock, according to the report. Competitive bidding for prime assets in core locations will accelerate, driven by conviction and capital discipline.
Meanwhile, secondary assets will face mounting pressure to reposition or upgrade, as investors seek resilience and growth. The divide between ‘must sell’ and ‘prefer to hold’ will become the key market segmentation, with creative repositioning essential for liquidity in non-core stock.
ESG shift
Savills states that ESG and sector rotation will ‘redefine’ investment strategies. Sustainability will shift from optional to obligatory, with mandatory climate-related reporting and energy efficiency upgrades becoming standard.
Investors will rotate capital into growth sectors such as logistics, data centres, and living, while retail and office assets will need to demonstrate ESG-readiness to attract capital.
The ‘bull market mindset’ will favour assets aligned with long-term structural drivers, and value-add plays will outperform greenfield development. This means that investors will face pressure to deploy capital in 2026 amid a synchronised market rally.
