Australia Commercial Real Estate Market Report and Forecast 2025-2034

Australia Commercial Real Estate Market Report and Forecast 2025-2034

Market Outlook

According to the report by Expert Market Research (EMR), the Australia commercial real estate market size reached around USD 33.88 billion in 2024. Aided by the increasing real estate demand across key sectors and a resurgence in investor confidence, the market is projected to grow at a CAGR of 7.9% between 2025 and 2034, reaching almost USD 72.6 billion by 2034.

An important factor contributing to the Australia commercial real estate market growth is the growing demand for industrial properties. The surge in e-commerce activity has led to an increased need for warehouses, distribution centres, and logistics facilities. As online retail continues to thrive, logistics companies and e-commerce giants require advanced infrastructure to meet consumer demands for faster delivery times and efficient inventory management. This trend is expected to sustain the strong demand for industrial properties over the next several years, driving the growth of the market in Australia.

Moreover, the Australia commercial real estate market expansion is being influenced by shifting consumer behaviours and preferences. The rise of remote and hybrid working models has transformed the office space market, with many companies reconsidering their space requirements. While traditional office demand has softened in some areas, there is a growing preference for flexible, well-designed office spaces that accommodate collaborative work environments. This shift is encouraging property developers to innovate by incorporating more adaptable office layouts, increased use of technology, and enhanced health and safety measures.

The retail sector, too, is undergoing a significant transformation in the Australia commercial real estate market. The rise of e-commerce has forced traditional brick-and-mortar retailers to adapt, with many seeking smaller, more efficient stores located in high-traffic areas or within shopping centres that offer a combination of physical and digital shopping experiences. The demand for retail spaces in prime locations is expected to remain strong, especially in urban centres where consumer foot traffic is high. However, there is also a noticeable shift towards lifestyle-oriented retail spaces, with a focus on providing experiences rather than just products.

In addition to changing consumer preferences, sustainability has become a key focus within the Australia commercial real estate market. With an increasing emphasis on environmental responsibility, both tenants and investors are placing higher value on properties that offer energy-efficient features, sustainable building materials, and smart technologies. Green building certifications such as NABERS (National Australian Built Environment Rating System) and Green Star are becoming essential considerations for both commercial developers and occupiers. The growing trend toward sustainability is also driven by the broader global focus on reducing carbon emissions and promoting responsible construction practices.

Government initiatives aimed at supporting sustainable development further bolster the Australia commercial real estate market development. Policies encouraging energy-efficient designs, carbon neutrality, and green infrastructure are influencing both the demand for and supply of environmentally friendly commercial real estate. The adoption of sustainable practices not only aligns with global trends but also helps businesses reduce operating costs, attract eco-conscious tenants, and meet regulatory requirements.

Despite the positive outlook, there are challenges that the Australia commercial real estate market must address. One of the most significant concerns is the rising cost of construction and materials, driven in part by supply chain disruptions. These increased costs are putting pressure on developers, particularly in the residential and commercial sectors, where cost overruns can affect the profitability of projects. Additionally, the tightening of the credit market and the potential for rising interest rates could lead to reduced investment activity in the market. However, despite these challenges, the market remains resilient, with ongoing demand for high-quality, well-located properties.

The Australia commercial real estate market dynamics is also being shaped by technological advancements. The integration of smart technologies, such as IoT (Internet of Things) sensors and building management systems, is enhancing the functionality and efficiency of commercial properties. These technologies enable building owners and tenants to monitor and control various aspects of their buildings, such as lighting, temperature, and security, in real time. The growing adoption of proptech solutions is making commercial properties more attractive to tenants, improving operational efficiency, and reducing costs for property owners.

The booming hotel and hospitality sector has positively impacted the Australia commercial real estate market outlook, with increasing demand for accommodation, particularly in major cities like Sydney, Melbourne, and Brisbane. The revival of international tourism, along with a surge in domestic travel, has supported the recovery of this segment. Investors are keen on acquiring hotels, resorts, and other hospitality-related properties as the sector rebounds, creating opportunities in the market. As the sector evolves, the demand for innovative hospitality spaces, such as boutique hotels and short-term rental accommodations, is expected to rise.

In conclusion, the Australia commercial real estate market is positioned for steady growth over the next several years, driven by factors such as the recovery of the economy, the rise of e-commerce, evolving consumer behaviours, and increased demand for sustainable properties. While challenges such as rising construction costs and tightening credit conditions may impact market dynamics, the ongoing demand for flexible, energy-efficient, and well-located commercial properties will support long-term growth. As the market continues to adapt to shifting trends, innovations in technology, sustainability, and flexible space usage will be critical drivers of success in the evolving landscape of Australian commercial real estate.

Market Segmentation

The market can be divided based on type and region.

Market Breakup by Type

• Industrial and Logistics
• Offices
• Multi-family
• Hospitality
• Retail

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Competitive Landscape

The EMR report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Australia commercial real estate market. Some of the major players explored in the report by Expert Market Research are as follows:

• Meriton Group
• Frasers Property Australia Pty Limited
• Stockland Corporation Limited
• Mirvac Limited
• ABN Group
• Knight Frank Australia Pty Ltd.
• Colliers International
• Gorman Allard Shelton Pty Ltd.
• Others

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*We at Expert Market Research always strive to provide you with the latest information. The numbers in the article are only indicative and may be different from the actual report.