Commercial real estate sales in Australia surged in the first half of 2025, following interest rate cuts and positive investor sentiment.
Sales rose by 13% year-over-year to A$15.5 billion, according to a report by CBRE. This was driven by increases in the Retail and Industrial & Logistics sectors.
“This positive momentum was fuelled by improved investor sentiment, spurred by two interest rate cuts year-to-date in Australia and expectations of further easing,” according to CBRE.
“The outlook remains positive with the market pricing in more rate cuts over the coming 12 months in Australia. In addition, pricing looks relatively attractive across asset classes which is attracting investors back into the market.”
The Industrial & Logistics sector saw a 98% jump in sales activity year-over-year, reaching $5.4 billion.
Retail, the second-largest sector by sales activity, recorded 29% growth to $4.7 billion. The Hotels sector posted the greatest decline, falling by 54%.
Offshore investment in Australia’s commercial property rose by 17% year-over-year, with 45% of investment in the Office sector and 41% in Industrial & Logistics properties.
North American investors were the largest source of capital, bringing $1.86 billion to the Australian commercial property market in the last half. Japan and Singapore were the largest sources of capital in Asia, at $910 million and $719 million respectively.
The Reserve Bank of Australia is set to meet next week, with economists at Australia’s four main banks predicting a 25 bps rate cut. Previous rate cuts in February and May were also 25 bps.
