Australia Commercial Real Estate Market

Australia Commercial Real Estate Market Overview:

The Australia commercial real estate market size reached USD 11.96 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 21.03 Billion by 2033, exhibiting a growth rate (CAGR) of 5.80% during 2025-2033. The market is driven by the rise of hybrid work, accelerating demand for flexible office spaces, and a strong focus on sustainability, with green-certified buildings attracting premium tenants. Urbanization and infrastructure investments in major cities support growth, while low vacancy rates in prime locations drive competition. Additionally, foreign investments and favorable government policies are further expanding the Australia commercial real estate market share, ensuring steady demand for high-quality commercial assets.

Australia Commercial Real Estate Market Trends:

Rising Demand for Flexible Office Spaces

The market is experiencing a growing demand for flexible office spaces, driven by changing workplace preferences. In July 2024, Australia's national office vacancy rate dipped marginally to 14.6%, which marked the first time since early 2023 that both CBD and non-CBD markets reported strong demand. Brisbane posted the biggest fall, at a vacancy rate of 9.5%, followed by Sydney, which fell to 11.6%. Melbourne's vacancy rate increased to 18% since more than 500,000 square meters of new office space is due to be launched in Sydney and Melbourne by 2026, with 61.4% of Sydney's and 20% of Melbourne's future developments pre-leased. Businesses, particularly startups and SMEs, are increasingly opting for coworking offices and serviced offices due to their affordability and flexibility. The increasing trend towards hybrid working is driving this growth, where businesses desire flexible leases that can be adapted to the number of workers in the office. Cities such as Sydney, Melbourne, and Brisbane are witnessing a growth in high-end flexible workspace providers, such as quick internet services, collaboration areas, and wellness facilities. Landlords also want to transform their buildings, with flexible lease arrangements for conventional office structures, due to the competitive market's changing dynamics. The trend is expected to continue to expand as businesses will continue to focus on agility in the new work world, and flexible office and workspace choices are a major growth area in the market.

Increasing Investment in Sustainable Buildings

Sustainability is becoming a critical factor in the commercial real estate sector, with investors and tenants prioritizing energy-efficient and environmentally friendly buildings. During the 2023/24 year, Australia's Green Building Council certified over 1,000 projects, taking the total area of Green Star-certified space to 64 million square meters, with 46% of central business district offices now sustainability certified. The adoption of government-led Net Zero policies and an increase in industry submissions have accelerated the adoption of sustainable building practices. With 3.4 million daily shoppers passing through Green Star-rated shopping malls and almost a million residents of certified communities, sustainable design is revolutionizing Australia's commercial property industry. Green certifications such as NABERS and Green Star are now major selling points, as they enhance property valuations and attract long-term tenants. Therefore, this is also propelling the Australia commercial real estate market growth. In accordance with shifting consumer behavior and the demand for environmentally friendly choices, developers are more incorporating eco-sustainable features such as solar panels, rainwater harvesting, and smart energy monitoring and management systems into their properties. Business environmental, social, and governance (ESG) commitments and government regulation will further drive this trend as landlords refit existing older buildings in order to enhance energy performance. The major office markets of Sydney and Melbourne are undergoing the most significant change, whereby buildings with sustainable features are drawing higher rents and lower vacancy rates than traditional buildings. With the growth of climate-friendly investing in Australia, green commercial real estate will be an essential part of the commercial property market, delivering financial returns as well as an environmental benefit.

Australia Commercial Real Estate Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for 2025-2033. Our report has categorized the market based on type and end use.

Type Insights:

• Rental
• Sales

The report has provided a detailed breakup and analysis of the market based on the type. This includes rental and sales.

End Use Insights:

• Offices
• Retail
• Leisure
• Others

A detailed breakup and analysis of the market based on the end use have also been provided in the report. This includes offices, retail, leisure, and others.

Regional Insights:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia

The report has also provided a comprehensive analysis of all the major regional markets, which include Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Australia Commercial Real Estate Market News:

• May 9, 2025: CoStar Group, a leading provider of commercial real estate information and analytics, finalized a binding agreement to buy the entirety of Domain Holdings, one of Australia's premier property marketplaces, for AUD 3.0 Billion. Following the earlier acquisition of a 17% stake at AUD 452 Million, CoStar will make a AUD 4.43 per share bid for the balance 83%, subject to shareholders' and regulators' approval. This strategic deal strengthens CoStar's international presence and reinforces Australia's commercial real estate digital infrastructure.

Australia Commercial Real Estate Market Report Coverage:

Key Questions Answered in This Report:

• How has the Australia commercial real estate market performed so far and how will it perform in the coming years?
• What is the breakup of the Australia commercial real estate market on the basis of type?
• What is the breakup of the Australia commercial real estate market on the basis of end use?
• What is the breakup of the Australia commercial real estate market on the basis of region?
• What are the various stages in the value chain of the Australia commercial real estate market? 
• What are the key driving factors and challenges in the Australia commercial real estate market?
• What is the structure of the Australia commercial real estate market and who are the key players?
• What is the degree of competition in the Australia commercial real estate market? 

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia commercial real estate market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Australia commercial real estate market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia commercial real estate industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.