December 2024
NATIONAL COMMERCIAL REAL ESTATE OVERVIEW
“What is more interesting, however, is that commercial real estate (CRE) capital markets have begun to recover despite a more conservative path for interest rates. Through the first nine months of 2024, investment volumes are already A$1 billion higher than the entire 2023 calendar, with the growth trend set to continue in Q4.
“Office, retail, and industrial volumes have already surpassed recorded investment volumes for 2023, while Alternatives are on pace to match the previous year’s volume”. Ms Wild said "Commercial real estate valuations are expected to stabilise in 2025, accompanied by a gradual recovery in transaction volumes. Cushman & Wakefield projects an overall 8% adjustment in CRE pricing during this cycle, with a rebound of 20% anticipated by 2030, beginning in late 2025. The pace and extent of this recovery will differ across asset classes, as the RBA shifts its stance and the economy emerges from a cyclical slowdown, paving the way for renewed market momentum."
NATIONAL CAPITAL MARKETS
Josh Cullen, Cushman & Wakefield's International Director & Head of Capital Markets, Australia and New Zealand said 2024 marked a recovery year, with the highest commercial transaction volumes in recent years and renewed capital interest in the office sector.
"Sydney led the way, with over $5 billion in transactions, reflecting investor confidence in future supply shortages driving positive growth.
"There are clear signs of capital re-awakening to the attractive returns in the office sector, which offers compelling value compared to other asset classes. Valuations have adjusted significantly, and the sector’s fundamentals are being undervalued."
NATIONAL LOGISTICS & INDUSTRIAL CAPITAL MARKETS
Tony Iuliano, Cushman & Wakefield's International Director, Head of Logistics & Industrial – ANZ said capital has continued to subscribe to the investment thesis for logistics, supported by solid fundamentals and sustained sector tailwinds.
“Investment volumes for 2024 have well eclipsed 2023 levels, headlined by several significant trades, while the stabilisation of debt costs since late 2023 has aided in this improvement, providing greater clarity on where pricing sits. Notwithstanding this, assets remain tightly held as volumes for 2024 have only represented around 2.0% of the sector’s total investable universe of approximately $320 billion”.
“Superannuation funds have driven deal volumes at the larger end of the market, while the dial around offshore capital inflows has shifted with momentum building throughout 2024. This has been headlined by capital out of Japan, which now represents a key market for inbound flows.
Tony Iuliano said “Looking to 2025, a more dynamic landscape is anticipated against a backdrop of potential rate cuts and moderating bond yields. Asset values have been reset, and capital now recognises that there is a window of opportunity in the first six months of the year before a yield compression cycle begins in mid-2025.
“Globally, yields for logistics are already compressing in select markets, and Australia is expected to follow suit in 2025. This will trigger greater liquidity, and we are anticipating a substantial jump in investment volumes as a result”.
“Buyer participation will remain strong for core-plus and value add opportunities; however, the market has reached an inflexion point where counter-cyclical strategies should be considered, including a shift to core as forecast rate relief in 2025 will be accretive to returns. Portfolio premiums are also expected to re-emerge as obtaining scale will continue to prove challenging”.
NATIONAL LOGISTICS & INDUSTRIAL
David Hall, Cushman & Wakefield's National Director, Head of Brokerage Logistics & Industrial – ANZ said “As we look back on 2024, it will be remembered as a year of market adjustment as vacancy rates edged higher given a normalisation of demand and high volumes of speculative stock additions.
“However, take-up volumes in 2024 will exceed the pre-pandemic average by over 40%, while vacancy rates in Australia remain the tightest globally. Similarly, select submarkets will still record double-digit growth for the year.
“Looking ahead to 2025, leasing demand is anticipated to strengthen further, driven by an uptick in economic growth and further improvements in consumer spending. We are forecasting take-up levels to jump to around 3.6 million sqm in 2025, representing an almost 20% increase from current levels. Supply will also thin as developers hold back some projects, which could result in the market tightening further as demand picks up.”
NATIONAL INVESTMENT SALES
Luke Etherington, Cushman & Wakefield's Head of Investment Sales, Australia reflected on the property market in 2024, describing it as largely a year of "waiting and seeing" for most investors.
"Many were waiting for asset values to bottom out and for the subsequent correction in book values to materialise. Despite this cautious approach, consistent demand persisted for high-quality assets with strong cash flow fundamentals. By the fourth quarter, activity across all asset classes and income profiles had picked up significantly, creating promising momentum heading into 2025".
Looking ahead, Mr Etherington expressed optimism about the market's trajectory in 2025. "We believe asset values are at or near their cyclical bottom, and the cost of capital is likely to decrease further over the next 12 months. This, coupled with a resilient economy, is expected to spur a rise in transactional activity, particularly within institutional and high-net-worth private capital markets.” He also anticipates a resurgence of large-scale mergers and acquisitions, as well as fund recapitalisations.
"Investor sentiment has shifted noticeably," he added. "The question is no longer 'if' but 'when' capital should be reinvested into real estate markets. This change in mindset signals a renewed confidence that could define the year ahead."
NATIONAL OFFICE LEASING
Tim Molchanoff, Cushman & Wakefield’s Head of Office Leasing Australia and New Zealand highlighted the ongoing resilience and adaptability of the Australian office market amidst the evolving landscape shaped by the pandemic and shifting work patterns. He notes a strong uptick in demand for office spaces across national CBD markets, with Brisbane and Perth seeing well-distributed demand across the CBD, while Sydney and Melbourne focused on core CBD assets for much of 2024.
“Recently, there has been an increase in enquiries for other CBD precincts in these cities, although the majority still seek quality in the core areas.
Mr Molchanoff stated, "While elevated construction costs and shifting work practices pose challenges, they also open doors for innovation and strategic positioning. Tenants can secure prime office spaces that cater to their evolving needs, while landlords and investors can take advantage of an improving economic backdrop and recovery in capital markets to drive long-term growth.
“There is also a need for tailored solutions to meet the diverse requirements of tenants and landlords, driven by varying work-from-home and return-to-office mandates across the country and among different employers. Looking ahead to 2025, the market will continue to evolve, necessitating innovative and bespoke approaches to office leasing.
As the market continues to evolve, Mr Molchanoff stressed the importance of agility and forward-thinking.
"Businesses that embrace change, take proactive leasing, investing, and asset management approaches, and remain attuned to shifting conditions will be well-positioned to capitalise on the opportunities that lie ahead in this new era of office leasing," he added. "The ability to anticipate and respond to market trends will be crucial for success in 2025 and beyond."
NATIONAL PROJECT DEVELOPMENT SERVICES
Mitch Wilson, Cushman & Wakefield’s Head of Project & Development Services, ANZ said 2024 has been built on our relentless drive to expand our core business by focusing on the Government (Federal, State and Local), Industrial, Agribusiness and Data Centre sectors.
“We have seen a downturn in commercial fitout works across all cities with 94% of tenants looking for space in already fitted tenancies and spec suites.
“Price has still been a driving factor for many clients as they continue to drive business efficiencies. Our wins this year have come from deep-seated connections in developed relationships with clients that truly value a ‘partnership approach’ in a transparent and open manner.
“With an increased focus on the quality of construction, investors need to be assured that their investment is valuable. Given the increased construction costs and potential decrease in quality, assurance needs to be considered when matching quality for price.”
Mr Wilson sees 2025 throwing up similar challenges to 2024 with interest rate falls not expected until H2 of 2025.
“Government spending will continue, and promises will be made with the election poised to occur in May. Many Government contracts have already been tendered and will be renewed in mid-2025 which provides opportunities for businesses that are strong financially, stable and ready for the next wave of Government expenditure.
“We expect real estate transactions to increase in 2025, especially with determination dates of unlisted property trusts. There is also a theme of property investors needing to gain an understanding of their assets, especially important with sustainability reporting requirements that have now been legislated.
ADVISORY+
According to Alan Herrman, Partner, Advisory+ at Cushman & Wakefield, market dynamics over the past 12 month have provided different challenges, but also significant opportunities across the broad range of sectors that the Cushman & Wakefield’s Advisory+ team works in.
“Private investors and markets have been looking at increasingly diverse opportunities and sectors to invest in living, healthcare and government-sponsored initiatives (such as transport, health, energy-transition and housing programs). Our team in Advisory+ has seen a clear thematic of investment needs beyond traditional areas of real estate investment, supported by Superannuation, overseas pension funds, private equity and other institutional investors looking to Australian shores for long-term investment into emerging asset classes.
“For Governments across Australia, many entered a period of ‘fiscal repair’ post COVID-19 pending and “big build”- like spending programs, and increasingly have sought ‘efficiency dividends’ in budgets. This includes rubber stamping of opportunities to divest assets, government-owned businesses or surplus sites and consolidating operating models and office footprints, all of which provides opportunities for private sector partnering or input.
“The appetite for co-investment between Government and the private sector has grown, as evidenced by revamped market-led proposal processes and greater partnering opportunities attached to major projects.
“Whilst construction activity in some sectors has been hampered by interest rates and inflationary pressures, some sectors have seen a spike in activity, for example in social and affordable housing, due to the Federal Government’s Housing Australia Future Fund (HAFF) subsidies and State based programs. Government activity is expected to pick up as funding commitments are made at both the Federal and certain State levels as we move through the next election cycle.
“For our Corporate clients, the need for cost savings and consolidation of spend and efficiency in operations have been more than evident, as new ways of working evolve, customer preferences change and margins (in many sectors that have been squeezed) have made their impact on operating performance and future direction.
“Getting clients match-fit for value realisation activity across their portfolios, major divestments, forthcoming M&A activity, along with gearing up for new opportunities in the new year has been a key trend observed, noting that many of these initiatives have long lead in times as decisions move through the governance structure and gain conviction”.
NEW ZEALAND COMMERCIAL REAL ESTATE OVERVIEW
According to Paul Huggins, Cushman & Wakefield’s Managing Director, New Zealand, "2024 saw Cushman & Wakefield New Zealand successfully expand its market share by advancing its leasing, project and development services, as well as its facilities management division.
“As we look ahead to 2025, we anticipate a rebound in the real estate sector, driven by controlled inflation and strategic growth initiatives, including welcoming international investment.
“With the New Zealand Government’s commitment to developing stronger infrastructure and embracing public-private partnerships (PPP) and other major projects, we are optimistic about the future outlook from Q2 onwards. Cushman & Wakefield NZ is well-positioned to leverage these opportunities and continue our trajectory of growth and success.”
SUSTAINABILITY OVERVIEW
According to Matt Clifford, Cushman & Wakefield’s Head of Sustainability & ESG Asia Pacific, 2024 has seen a great deal of maturation in terms of country and company level sustainability standards.
“ESG regulations are increasing in complexity and scope, with new standards launching in Australia, already in place across other Asian markets, and coming soon to Japan and other markets. The most mature organisations are well underway in terms of responding and staying ahead of these regulations, and already finding ways to differentiate themselves and look beyond simple compliance.
“Sustainability has always been about optimising performance and achieving higher standards. However, regulation is forcing the laggards to increase their pace. The option to do nothing is no longer viable, but the good news is that simple and cost-effective steps can be taken right away, helping drive improvements across businesses.”
“Considering the changes in the US political sphere, some might expect sustainability to take a backwards step, however history is a good guide. During the last Republican administration, efforts around sustainability doubled and tripled, with a range of new measures being deployed across Europe and Asia, and within the US at the State or Municipality level. Our clients are operating under more complex times, which means demonstrating progress is more important than ever before” he said.
Gehan Palipana, Cushman & Wakefield’s Head of Sustainability, ANZ said ESG disclosure continues to be a major topic of interest in Australia with the Australian Sustainability Reporting Standards (ASRS) taking effect from 1st of January 2025 for the first tranche of organisations captured by the standard.
“The ASRS requirements represent the most significant step forward in climate and sustainability performance disclosure in Australia for a number of years and will compel organisations to disclose their scope 1, 2 and 3 emissions, as well as provide information on how they are assessing and responding to climate risks facing their organisation.
“For the property industry, the spotlight on scope 3 or supply chain emissions will be particularly relevant as the focus of sustainability programs expand from running buildings efficiently to minimising emissions across the entire property lifecycle and embedding circular economy and zero waste principles to reach organisational net zero goals”.
VICTORIA
Melbourne Investment Market
Daniel Wolman, Cushman & Wakefield’s International Director of Investment Sales in Victoria, said as 2024 draws to a close, Melbourne’s commercial property market has shown its ability to weather challenges and adapt to shifting dynamics.
“The first half of the year was marked by uncertainty, with a subdued mood dominating investor sentiment. However, conversations around potential interest rate cuts—despite no definitive timeline—have sparked renewed optimism and created a foundation for positive momentum in the market.
“This year, we saw local high-net-worth investors and syndicators taking the lead, driven by a strong appetite for value-add opportunities and strategically priced assets. Some of Melbourne’s most notable transactions highlight the market's underlying strength, including the sale of 1 Dean Street, the largest metro office transaction this year at $38m; Melbourne Central Corner, the largest Melbourne CBD retail sale of 2024 at $62.388m; 281 Springvale Road, Glen Waverley; the largest metropolitan development site to trade in 2024 at $50.88m; and 380 Queen Street, the largest CBD development site sale in five years at $115m”.
Mr Wolman said the standout lesson of 2024 has been the enduring belief in Melbourne’s potential as a global destination for investment. Notably, Malaysian property giant Sime Darby made a significant statement, investing $115 million in a 95,000-square-metre mixed-use development. “This move underscores the confidence international developers place in Melbourne's long-term growth story.
“Additionally, we’re seeing increasing interest from Asian and Middle Eastern capital, while local groups remain highly competitive. Domestic investors, in particular, are strategically capitalising on the adjustment period for offshore groups navigating recent land tax changes”.
Looking ahead to 2025, Mr Wolman expects capital to flow from a mix of sources. “Internationally, sovereign wealth funds and private capital from Asia and the Middle East will likely continue to increase their footprint in Melbourne. Domestically, HNW investors and syndicators will remain active, especially as value-add and development opportunities come to the fore.
“Hotspots for growth will centre on mixed-use developments and precincts that integrate residential, retail, and commercial uses—areas that align with Melbourne’s vision of liveability and sustainability. Infrastructure-rich suburbs and transport-linked corridors are also poised for continued interest.
“Melbourne’s resilience in 2024 has been impressive, and with the right macroeconomic conditions, the stage is set for a dynamic and competitive 2025.”
Melbourne Industrial
“A reverse of current trends is anticipated in 2025 as supply is forecast to fall away sharply from the end of Q1 2025, while demand from larger occupiers is expected to recover in line with an improvement in consumption levels and economic growth. Incentives have risen in 2024; however, we expect there will be scope for these to start declining from mid-2025 as vacancy levels stabilise and begin to tighten in select precincts. Our message to occupiers is to be proactive in the current market before the pendulum potentially shifts back to the landlord.”
Melbourne Office Leasing
“With pent-up demand from delayed decision-making and greater clarity around return-to-office trends, the Melbourne CBD is poised for a faster-than-expected recovery."
Melbourne Retail Leasing
“Retail markets have seen steady recovery post-COVID-19, with increasing foot traffic in CBDs and shopping districts as workers return to offices and tourists flock back to major cities like Melbourne. However, this growth is uneven, favouring prime locations over secondary retail areas.
“The hospitality sector continues to lead the charge in retail leasing, with demand for spaces from restaurants, cafes, and boutique food operators along Swanston Street, Flinders Lane and other dining precincts.
“Rising interest rates and inflation are putting pressure on retailers' margins, making affordability a key factor in lease negotiations. Shorter lease terms and incentives, such as rent-free periods or landlord contributions, are becoming common.
“High-traffic areas, particularly near iconic landmarks, transport hubs, and within luxury precincts (e.g., Collins Street), remain in high demand. Secondary locations face more significant challenges in attracting tenants.
Mr Di Carlo went on to say retailers appreciate flexibility, leading to innovative leasing structures like turnover-based rents or shorter initial lease terms. Projects like Bourke Street Mall’s redevelopment and other CBD activations offer new leasing opportunities for tenants seeking premium spaces.
“In 2025, we will see continued recovery with foot traffic normalising. With the full return of workers, tourists, and students, CBD retail markets will continue to recover, bolstering demand for prime CBD retail spaces.
“Food and beverage operators will remain dominant in the leasing market, especially in areas with high pedestrian traffic and within mixed-use developments.
“Consumers will increasingly seek memorable instore experiences. Retail spaces with features like pop-up zones, interactive displays, and experiential setups will be in demand.”
He believes prime retail areas like Melbourne's Collins Street or Bourke Street Mall will see stable rents, driven by high demand from international brands. Secondary locations may require more aggressive incentives, such as rent-free periods, tenant fit-out contributions, and turnover-based rents, to attract tenants.
“Challenges will include pressure on retailers – the rising costs and competition may force small or traditional retailers to reassess their footprints, leading to higher turnover in retail locations. And global economic fluctuations, including potential recession risks or inflation, could influence leasing terms and tenant affordability”.
NEW SOUTH WALES
Sydney Capital Markets
“Assets holding the most value in 2024 tended to be specialised in nature, which attracted the sharpest capital. Examples include education facilities, or buildings with extensive laboratory space that appeal to life science investors.
“The increased sales activity in the Sydney CBD core in 2024 seems to indicate the market has bottomed, however Metropolitan Sydney valuations have further to fall in order to see liquidity return across the wider market.
“We expect valuations to soften in 2025 in the Metropolitan market as the weight of evidence from recent sales becomes irrefutable. When this occurs, we expect transaction volumes to increase significantly.
“Buyers still face the challenge of raising capital for office assets, however we expect this to ease in 2025 as the back to office trend continues, and borrowing costs fall”.
Sydney CBD Office Leasing
"In the second half of 2024, we observed additional demand extending beyond the CBD core, particularly in Midtown and Western Corridor Precincts. This period saw a significant uptick in the 'flight to value,' with tenants targeting good quality assets with larger floorplates. This additional demand contributed to strong rental growth in the last few months, with the growth rate in the final two quarters outpacing that of the first half of the year.
"Looking ahead to 2025, we anticipate some upward pressure on vacancy rates as new supply comes online. However, we also expect this new supply to enhance overall quality, with this quality uplift driving rents higher throughout the year. Coupled with improving economic conditions and a recovery in capital markets, the outlook for the Sydney CBD in 2025 is significantly more positive than this time last year.”
South Sydney Industrial
Mr Mallett went on to say “2025 is shaping up to be a positive year for the South Sydney market, supported by several local and broader economic factors. Firstly, supply levels will thin in 2025 while the consumer environment is improving, which will support higher container volumes through Port Botany and demand for central warehouse space adjacent to population densities.
“Secondly, on the investment front, the forecast for falling interest rates in 2025 provides substantial upside to asset values for the year ahead as liquidity improves. However, with South Sydney being Sydney’s premier market, assets are expected to remain tightly held.”
Western Sydney Industrial
“Looking ahead to 2025, the supply pipeline is expected to thin as developers hold back on some speculative projects given more uncertainty in letting up periods. If demand strengthens off the back of improvements in consumer spending, this could create an environment where the upper hand shifts back in favour of landlords. We recommend that occupiers take advantage of current market conditions where in select precincts, net effective rents have declined from a year ago.”
QUEENSLAND
Brisbane Commercial Sales
According to Andrew Gard and Michael Gard, Cushman & Wakefield’s Directors of Brisbane Commercial Sales, "Elevated construction costs and interest rates posed the greatest challenge in 2024 for the Brisbane commercial market, particularly making the development site market challenging when also considering the lack of builder availability for projects of significant scale.
“However, established buildings with appealing fundamentals and value-add propositions experienced strong demand from buyers, as illustrated by the sale of 'The Paddington Antiques Centre' which transacted for $8.3m on a cash, unconditional basis equating to a 5.92% initial yield.
“Additionally, commercial assets offered to the market with vacancy have experienced the strongest demand from owner-occupiers, with motivations to transition to purchasing being largely driven by recent increases in leasing costs.
“Moving forward into 2025, we anticipate dramatic improvements of buyer sentiment for the development site market. The 100-day review into the infrastructure required to facilitate the Olympic Games will bring certainty to developers around timings and locations, in-addition to revenues climbing on both the build-to-sell and build-to-rent basis induced by the tailwinds of housing shortages across the city.
“We anticipate owner-occupiers to continue to be a strong force within market, as they aim to reduce leasing costs in the face of further rental growth and aim to provide high quality office amenity to retain staff. Investor sentiment will likely improve due to widely anticipated interest rates cuts in 2025, in addition to rental growth improving returns on assets.”
Brisbane Office Leasing
Looking ahead, Neumann predicts that “the Brisbane office market will continue its stellar performance into 2025, albeit with a slight moderation in rental growth. The forecast indicates that prime effective rents in the CBD are anticipated to grow by an average of 4.8% annually from 2025 to 2028. Additionally, vacancy rates are expected to decline even further throughout 2025, reaching levels not seen in over a decade. This decline will be driven by a lack of new, uncommitted, supply and sustained tenant demand.
“The ongoing flight to quality remains a significant factor, as the demand for premium and A-grade spaces continues to drive rental growth. This is especially the case for contiguous space, which further exacerbates the situation.
“Overall, the future of the Brisbane office market appears promising, with continued growth and positive market conditions expected. The combination of limited supply additions, high tenant demand, and a flight to quality will enable Brisbane to maintain its strong performance and remain an attractive destination for businesses seeking prime office spaces.”
Queensland Industrial
Morgan Ruig, Cushman & Wakefield’s Director & Head of Industrial Brokerage, Queensland, said the Queensland market has continued to experience extremely strong rental growth.
“The Queensland industrial brokerage market has continued to hold strong with record breaking leasing results and strong occupier sales. Total turnover of significant sales (over $10mil) almost doubled that of last year in QLD. We expect this to continue in the New Year given the strength of the occupier and capital markets and limited supply of both land, vacant buildings and investment opportunities in the core industrial areas”.
WESTERN AUSTRALIA
Perth Capital Markets
Perth Industrial
“The supply pipeline remained active, with 134,000 sqm delivered in 2024 and nearly 200,000 sqm projected for the year ahead. Transaction volumes in capital markets were subdued as the bid-ask spread impacted deal flow. Despite this, WA's market continued to attract strong buyer interest, particularly for assets with immediate or short-term rental reversion opportunities, though core assets with delayed reversion presented more challenges.
“Looking ahead to 2025, tenant demand is expected to remain buoyant, supported by the strength of WA's economy and ongoing population growth. Most activity is anticipated in the sub-6,000 sqm building size range. Vacancy rates are likely to decline over the next six months as the impact of speculative completions are absorbed, and lease renewal rates remain high, limiting backfill opportunities. Mid-single-digit rental growth is forecast, with core infill markets expected to outperform due to ongoing supply constraints”.
Perth Office Leasing
"In the sub-1,000 sqm market, speculative fitouts remain dominant, catering to the needs of tenants seeking ready-to-move-in solutions. While some softening has occurred in mining sectors such as lithium and nickel, the gold sector is performing strongly, and iron ore remains stable, providing a balanced outlook for the resources industry.
“The continued growth and relocation of tenants in finance, law, and State and Federal Government sectors highlights Perth's appeal as a hub for professional and administrative services.
"Looking ahead, 2025 is shaping up to be another highly competitive and active year for the Perth market, building on the momentum we've seen throughout this year."
Perth Tenant Advisory
Sonia Dissanaike, Director of Tenant Advisory Group ANZ at Cushman & Wakefield observes a growing trend of tenants entering the market much earlier, driven by increased competition for multi-floor tranches of space among occupiers requiring 2,000+ sqm.
“A significant factor is the impact of leases executed between 2015-2018, which are now above current market rates. These occupiers are facing heightened lease obligations, creating opportunities for owners to reset terms, retain tenants, and renew agreements. This approach can ease pressure on tenants while securing a longer Weighted Average Lease Expiry (WALE) for property owners.
“The market exhibits a dual-speed dynamic, distinguishing between well-maintained assets with ongoing refurbishments and enhanced amenities, and those without such investments. Properties in the first category are experiencing strong demand, while those in the latter face extended vacancies. Assets that have consistently undergone upgrades over the past decade are benefiting from increased interest and competition.
“Meanwhile, owners of properties that have deferred refurbishments, often due to single occupancies or limited vacancies, are now dealing with prolonged vacancy periods. It’s essential for these owners to accelerate improvements to seize market opportunities. The current environment highlights the importance of strategic asset management, focusing on upgrades that attract and retain tenants in an increasingly competitive landscape.”
SOUTH AUSTRALIA
Adelaide Capital Markets
According to Jed Harley, Cushman & Wakefield’s Director Capital Markets SA, Adelaide saw continued economic uncertainty around inflation and interest rates which resulted in subdued transaction volumes throughout the year.
"However, over the second half of the year, we saw growing interest in value-add opportunities within the office sector, and strong demand for retail investments. Metro markets remained resilient, with solid activity in the childcare and medical sectors.
"Large Format Retail and neighbourhood shopping centres were particularly sought after, though opportunities in South Australia remained scarce," he added.
"Looking ahead, we anticipate stronger demand in 2025, fuelled by cashed up local privates and an influx of interstate capital—especially from Victorian investors seeking relief from their high-tax environment. Limited supply in the $10 million to $50 million range throughout 2024 has created significant pent-up demand, particularly for retail assets and quality CBD offices."
Mr Harley emphasised that while there is still a pricing gap between vendors and purchasers, "Increased demand, potential for interest rate reductions, and higher quality sales evidence for valuers to set book values, will all help to increase price alignment between buyers and sellers” he said.
Additionally, Mr Harley highlighted growing interest in NDIS accommodation and the continued shortage of affordable housing as key drivers of demand in the residential land sector.
Adelaide Office Leasing
“Enquiry rates rose compared to the previous year as businesses revisited their accommodation strategies to balance work-from-home and office-based arrangements, ensuring their spaces meet the evolving expectations of employees. A clear trend emerged, with businesses continuing to prioritise quality.
“Approximately 80% of relocations in 2024 involved spaces under 500 sqm, where pre-fitted office spaces or speculative suites dominated the leasing landscape. These ready-to-move-in solutions proved particularly attractive for smaller tenants looking to minimise setup costs and timeframes.
“Larger tenants, occupying over 500 sqm, capitalised on the availability of backfill stock, leveraging competitive incentives offered by landlords eager to fill these vacancies.
“Looking ahead to 2025, this trend of smaller tenants pursuing high-quality spaces is expected to persist, particularly those under 500 sqm who are drawn to existing premium fitouts and speculative suites that mitigate the time and cost risks of new builds. Meanwhile, tenants with requirements exceeding 1,000 sqm are turning their attention to new developments, seeking cutting-edge amenities and ESG-compliant buildings that align with their corporate and environmental goals.
“Renewed confidence in the market, potentially spurred by interest rate cuts, could further boost relocation activity in the coming year, as businesses continue to refine their workplace strategies and adapt to market conditions.
“This ongoing evolution of tenant priorities underscores the need for landlords to remain agile, delivering spaces that meet the dual demands of flexibility and quality in an increasingly competitive market.”
