Cushman & Wakefield’s 2025 EOY Market Commentary & 2026 Forecast

NATIONAL COMMERCIAL REAL ESTATE OVERVIEW

Noral Wild, Cushman & Wakefield’s Chief Executive of Australia & New Zealand, said “The Australian economy delivered a steadier performance in 2025 as inflation moderated earlier in the year, and the Reserve Bank initiated its long-anticipated rate-cutting cycle in the second month of the year. While growth conditions remained moderate, the shift in monetary policy provided much-needed clarity for businesses and investors. 

“What stood out most in 2025 was the sustained resilience of commercial real estate (CRE) capital markets. Building on the momentum that emerged in late 2024, investment activity intensified as funding conditions improved, and economic visibility strengthened. By the end of the third quarter, transaction volumes across office, retail, industrial and alternatives had already surpassed 2024 totals, underscoring a broad-based revival in investor confidence.”
 
Ms Wild said, “Asset valuations stabilised through 2025, signalling a definitive turn in the current cycle. Cushman & Wakefield estimates that the market has now navigated the bulk of the anticipated pricing adjustment. Late-year transactions began to show modest upward pressure, reflecting renewed competition for quality assets and growing conviction that the market has passed its trough.
 
“Looking ahead, 2026 is expected to deliver a more meaningful recovery in both pricing and transaction activity. As the interest-rate outlook becomes clearer and economic conditions firm, market liquidity is projected to improve further, drawing additional capital back into the sector. CRE values are forecast to regain momentum through 2026, contributing to a cumulative rebound of around 20% by 2030. While the trajectory will vary by asset class, the sector now enters 2026 with a stronger platform for sustained recovery.”

NATIONAL LOGISTICS & INDUSTRIAL CAPITAL MARKETS 

Tony Iuliano, Cushman & Wakefield's International Director, Head of Logistics & Industrial – Australia & New Zealand said “2025 has seen a solid pick-up in investment volumes as both domestic and offshore capital continue to subscribe to the fundamentals within the logistics sector.
“Overall, the capital stack in 2025 has been diverse, with smaller and emerging managers making up a larger share of transaction activity compared to previous cycles. While US based capital remains dominant, participation by Japanese groups has increased sharply. That said, capital remains highly selective. Rather than pursuing broad exposure, capital is targeting assets and partnerships where alpha can be generated through active management, development potential, or platform expansion.
“Investment volumes this year have been heavily weighted towards the Sydney and Brisbane markets. However, we are beginning to see sentiment shift in Melbourne, where current market dislocation is presenting counter-cyclical opportunities for active investors. The forecast for rental growth outperformance over the next three years, particularly on an effective basis, underpins this renewed conviction in the Melbourne market.
 
“While core-plus and value-add capital continue to dominate current market participation, core capital is re-emerging, with a particular focus on portfolio acquisitions and joint venture structures. This renewed interest signals greater conviction of the sector's position in the cycle, with an upswing in momentum and returns anticipated in 2026 and into 2027.
 
“A more active market is forecast in 2026 as the buyer pool deepens with further new market entrants. Upcoming fund maturities and the selling down of balance sheet assets to support mandate growth is likely to generate further recapitalisation opportunities. 

“GP-led restructures will provide efficient entry points for investors seeking exposure to stabilised assets with clear value creation pathways, while capital recycling is likely to support the launch of new vehicles, expansion of existing funds and the scaling of platform-level partnerships”.

NATIONAL LOGISTICS & INDUSTRIAL

David Hall, Cushman & Wakefield's National Director, Head of Brokerage Logistics & Industrial – Australia & New Zealand, believes Australia’s logistics sector is entering a period of structural change as both occupier behaviour and supply dynamics shift.
 
“After two years of caution, improving sentiment, moderating supply and clearer economic signals are setting the stage for a more active leasing environment in 2026. Central to the recovery in demand is consumer spending, which is closely tied to warehouse demand, with retail trade and transport and logistics sectors accounting for almost 70% of demand over the past decade.
 
“For 2026, a recovery in net absorption is forecast, reaching almost 2.0 million sqm (gross take-up of 3.4 million sqm), up from its 2025 forecast of 550,000 sqm.
 
“On the flip side, a 46% fall in speculative supply is forecast over the next two years compared with 2024-2025 levels. Current feasibility constraints are expected to remain until 2027, at which point higher rents and yield compression will provide the tipping point for development. As a result, vacancy rates are close to their forecast peak in most markets and are expected to drift lower in 2026, particularly in land-constrained markets. 

“Rental growth has become much more varied at a submarket level in 2025, reflective of higher concentrations of supply. This theme is forecast to remain, with a 10% gap in rental growth between top and bottom-performing submarkets over the next five years”.

NATIONAL LOGISTICS & INDUSTRIAL TENANT ADVISORY  

Morgan Evans, Cushman & Wakefield’s National Director Tenant Advisory – Logistics & Industrial, said “2025 was the year occupiers recalibrated. With vacancy at historic lows and rents stabilising, tenants prioritised cost control and operational resilience. Demand shifted toward modern, automation-ready facilities close to urban hubs, driven by rising transport and labour costs.”
“In 2026, tenants regain negotiating power. As supply pipelines catch up and vacancy edges higher, expect more landlord concessions and opportunities to lock in favourable terms. Occupiers will leverage this breathing room to secure strategic locations, integrate ESG, and future-proof operations against tech disruption.
“The next wave of occupier strategy is about agility, balancing cost efficiency with proximity to customers and workforce. Those who act early will capitalise on softening conditions before competition intensifies.”

NATIONAL CAPITAL MARKETS

Nick Rathgeber, Cushman & Wakefield's International Director, Capital Markets, Australia and New Zealand said “With a widespread recovery of Australian office investment markets well underway, 2025 national office transactions are anticipated to comfortably surpass the 2024 total of $7.3 billion with many deals still in play.
“Sydney experienced a bumper year in 2024 with over $5 billion of major transaction in the CBD as investors looked to capitalise on favourable conditions and asset availability. 2025 has been characterised by a more limited investment supply landscape in Sydney, with investment liquidity subsequently spreading to all other markets nationally as leasing markets progressively improve and the investment risk of previous years abates.

“GPT and CSC’s acquisition of 75% of Grosvenor Place for $1.29 billion was the marquee transaction for the year, further demonstrating investor confidence in top tier CBD towers. Encouragingly, international investors returned to Melbourne with PAG and Singapore-based Trust Capital Advisors both making major plays acquiring 180 Flinders Street ($265m) and 750 Collins Street ($383m) respectively. 
“Japanese investors continue to grow their presence in Australia with manager Aravest’s purchase of 50% of Central Plaza 1 Brisbane ($200m), whilst the other major markets of Canberra, Perth and Adelaide are all reporting major deal activity not seen since 2022.
“Conditions are expected to improve further for sellers in 2026 as the well-documented lack of new office supply fuels rents and in turn returns for investors”.

NATIONAL INVESTMENT SALES 

Daniel Wolman, Cushman & Wakefield’s International Director & Co-Head of Investment Sales VIC, said “2025 was a year of resilience and recalibration for Australia’s investment sales market. Despite early headwinds from macroeconomic uncertainty and pricing dislocation, confidence returned as capital markets thawed, and transaction activity gained momentum.”
 
This renewed confidence was evident in Melbourne, where several landmark transactions underscored the market’s depth and strength, including:

• 185–195 Queensberry Street: the largest Melbourne Metro vacant development site sale at $114 million;
• 206 Bourke Street: the largest retail transaction in Melbourne CBD at north of $80 million, capturing over $1 billion in unplaced capital and;
• 470 Collins Street: the largest Melbourne B-grade office transaction at north of $60 million.

Mr Wolman said looking ahead to 2026, investor appetite is expected to strengthen further, supported by stabilising interest rates and narrowing bid-ask spreads. 
“We anticipate heightened activity in core and income-focused sectors, alongside growing interest in alternatives such as data centres, mixed-use projects, and build-to-rent. Structural trends including e-commerce growth, supply chain reconfiguration, and demographic shifts, will continue to shape demand, creating an outlook defined by cautious optimism and opportunity.”

NATIONAL OFFICE LEASING

NATIONAL LIVING SECTOR

Conal Newland, Cushman & Wakefield’s International Director, Head of Living APAC said “Global capital is rotating into Australian alternative real estate because the income streams are structurally underpinned by long-term demand rather than discretionary spending. 

“Student accommodation, retirement living and self-storage all benefit from powerful demographic and behavioural tailwinds, population growth, rising global student mobility, ageing, and urban density, which makes Australia a highly defensive-growth market on a global basis, alongside economic and political transparency.

“The Aveo and National Storage transactions are highly symbolic. These aren’t opportunistic transactions; this is patient offshore capital targeting platform-scale operating businesses with embedded growth. 

“When groups like Brookfield, GIC and Korea’s National Pension Service deploy capital at this level, it signals that Australia’s alternative sectors are now viewed as core global real estate allocations, not niche strategies.

“Over the next three to five years, we expect capital allocation to alternatives to accelerate as investors chase inflation-resilient income and operational growth. In many portfolios, student housing, retirement living and storage are already displacing traditional office exposure, and that transition is only just getting started in Australia.”

NATIONAL RETAIL

Luke Etherington, Cushman & Wakefield’s Managing Director, Victoria & Head of Investment Sales, Australia, said “Private capital remained highly active in 2025, particularly across sub $80m assets with strong cashflow and defensible trade areas. However, institutional capital has re-emerged with real conviction, driven by yield stability, improving debt terms and a renewed appetite for defensive retail. This resurgence helped unlock greater deal flow across neighbourhood, sub-regional and large-format retail.
“Looking ahead, we expect both private and institutional capital to be major drivers of liquidity in 2026. Private capital will remain active, but institutional groups, both domestic and offshore are now firmly back in acquisition mode as Australia’s yield premium widens and retail fundamentals strengthen. 
“Well-located centres with sustainable sales growth and diversified income streams will attract competitive bidding and further yield compression. We also anticipate heightened portfolio activity as groups reposition, recycle capital and recapitalise ahead of the next cycle.”

Trent Weir, Cushman & Wakefield’s National Director, Retail Capital Markets, Australia & New Zealand said retail capital markets continued to experience high transaction volumes in 2025, with investors again moving further up the retail hierarchy to either get access to better quality assets or in search of yield. 
“Regional Shopping Centres accounted for the majority of deal flow in 2025, with offshore capital partnering with local managers to leverage their retail skill sets and create scale. Low future levels of supply will continue to have a positive impact on rental growth, bolstering demand for large retail assets, especially those within in strong metropolitan locations.”
“2026 could be a record year for retail, with new capital entering the market via institutional led mandates, creating depth in pricing and ultimately putting downward pressure on investment yields”     
Daniel Radle, Cushman & Wakefield’s National Head of Retail Leasing & Management, Australia & New Zealand said retail leasing demand in 2025 was driven by strong tenant competition for prime convenience, neighbourhood and daily-needs assets, with enquiry levels increasing above pre-COVID benchmarks.
“F&B, health & wellness, and value-orientated brands continued to lead expansion, pushing rents higher in well-located suburban centres. Landlords increasingly prioritised experiential retail and tenancy remixing to maintain relevance and grow foot traffic. We expect leasing momentum to accelerate in 2026, with most markets reaching peak occupancy and rents pushing upward. Brand expansions will be driven by experiential retail, health & wellness, and F&B operators seeking scalable footprints.”

NATIONAL PROJECT DEVELOPMENT SERVICES

Mitch Wilson, Cushman & Wakefield’s Head of Project & Development Services, Australia & New Zealand said “2025 was a year of recalibration for Project Development Services in Australia. Persistent cost pressures and supply chain constraints required innovative delivery strategies, while sustainability and ESG compliance moved from being optional to essential. 
“We saw clients prioritise projects that balanced speed, cost efficiency, and environmental performance, with technology playing a bigger role in driving transparency and certainty across the lifecycle. Despite market volatility, demand for fit-for-purpose spaces remained strong, particularly in sectors like healthcare, logistics, and data centres.
“Looking ahead to 2026, we expect a renewed focus on adaptive design and future-proofing assets as organisations respond to evolving workplace needs and regulatory requirements. Clients will increasingly seek integrated solutions that combine cost control, sustainability, and digital innovation. 
 
“With interest rate stability and improving confidence, we anticipate a lift in project commencements, particularly in sectors aligned to growth drivers such as technology, life sciences, and urban regeneration. The key theme for 2026 will be agility, delivering projects that not only meet today’s needs but anticipate tomorrow’s opportunities.”

NATIONAL INTEGRATED FACILITIES MANAGEMENT & ASSET SERVICES

Jon McCormick, Cushman & Wakefield’s Head of IFM & Asset Services, Australia & New Zealand said “In 2025, the Facilities Management sector in Australia continued to gain momentum as more corporate and government clients went back to the outsourced market with significant opportunities across commercial, retail, industrial, alternative and social infrastructure markets. 

“The outsourced FM market has consolidated over recent years with clients looking to engage with providers that they trust and who will be a reliable extension of their existing in-house property teams.

Although we saw the number of first time outsourcing by clients increase, we also saw a number of specific service offerings being taken back in house, especially in terms of work place management and property/ lease administration. In addition, a number of larger corporate and government clients have invested heavily in their own property platforms which in the past, have traditionally been provided by the outsourced provider.
“In 2026 we are likely to see a continuation of the above trends with governments at all three levels continuing to underpin outsourcing markets whilst the corporate sector continues the cyclical program of insourcing, outsourcing and offshoring. The mix of services being outsourced will continue to change.”

NATIONAL STRATEGIC CONSULTING

According to Alan Herrman, Cushman & Wakefield’s Partner & Managing Principal, Strategic Consulting, Australia & New Zealand, "Private investors are increasingly looking beyond traditional real estate sectors, targeting living assets and government-backed initiatives such as transport, housing and energy transition. 
 
“We’re seeing significant interest from superannuation funds, overseas pension funds and private equity, with North Asian investors particularly active in Australia’s living sector, including Build-to-Rent and Purpose-Built Student Accommodation."
 
On Government activity, he believes Governments across Australia are entering a phase of fiscal repair following COVID-19 and major infrastructure spending. “This has created opportunities for asset divestments, consolidation of office footprints and partnering with the private sector on major projects. Real estate portfolios once considered ‘too hard’ are now firmly on the table."
 
On co-investment and housing, Mr Herrman said "The appetite for co-investment between government and private capital is growing, supported by revamped market-led proposal processes. Despite construction headwinds in some sectors, social and affordable housing is surging thanks to Federal initiatives like the Housing Australia Future Fund, which is driving delivery of thousands of new dwellings."
 
Looking towards 2026, Mr Herrman said "Our focus has been on getting clients match-fit for value realisation, major divestments and M&A activity, while positioning for new opportunities in 2026. These initiatives often have long lead times, requiring strong governance and conviction to execute."

NEW ZEALAND COMMERCIAL REAL ESTATE OVERVIEW

According to Paul Huggins, Cushman & Wakefield’s Managing Director, New Zealand, “2025 was a pivotal year for Cushman & Wakefield New Zealand, highlighted by the successful mobilisation of the Waikeria Prison PPP as part of advancing Government sector initiatives. Despite a challenging economic environment, we achieved approximately 5% growth, underscoring the resilience and strength of our team.”
“As we move into 2026, we’re focused on activating new contracts secured in 2025, expanding client portfolios, and introducing additional services such as Project and Development Services. These steps will enable us to deliver even greater value and deepen our client partnerships.”

“With Government priorities shifting toward infrastructure renewal and asset rejuvenation, coupled with improving economic sentiment, Cushman & Wakefield New Zealand is well-positioned to capitalise on these opportunities and sustain our growth trajectory throughout the year.”

SUSTAINABILITY OVERVIEW

Gehan Palipana, Cushman & Wakefield’s Head of Sustainability, Australia & New Zealand said “2025 has been a landmark year for ESG disclosure in Australia, with the Australian Sustainability Reporting Standards (ASRS) officially taking effect for the first tranche of organisations. This marks the most significant advancement in climate and sustainability reporting in years, compelling businesses to disclose scope 1, 2 and 3 emissions and outline how they are assessing and responding to climate-related risks.
“For the property industry, the focus on scope 3 emissions have been particularly transformative. Sustainability programs have expanded beyond operational efficiency to encompass the entire property lifecycle, embedding circular economy principles and zero-waste strategies to accelerate progress toward net zero goals.
“Looking ahead to 2026, we expect ESG compliance and transparency to deepen further as more organisations fall under ASRS requirements. This will drive greater collaboration across supply chains and increase demand for assets that meet stringent environmental standards. For landlords and developers, the challenge and opportunity will be to deliver buildings that not only meet regulatory obligations but also align with the growing expectations of investors, tenants, and the community for genuine sustainability leadership.”

VICTORIA

Melbourne Industrial 

According to David Norman, Cushman & Wakefield’s National Director & Head of Brokerage Logistics & Industrial - Victoria, said after a patchy first half of 2025, occupier sentiment has strengthened across Melbourne, although tenants remain cost-conscious and selective. 

“The flight to quality trend continues, with occupiers taking advantage of reduced net effective rents compared to the same time last year. The market is on track to record gross take-up of close to 1.2 million sqm in 2025, which remains above the long-term average of around 1.0 million sqm (2010-2015), while over 85% of activity year to date has been in prime or super prime grade stock.
“Looking ahead to 2026, market conditions are expected to tighten, with only 325,000 sqm of speculative stock scheduled to enter the market. The drop in supply in the West is even more pronounced, with just over 90,000 sqm of speculative space in the pipeline for the year and two quarters currently showing no new deliveries for the first time since 2019.”

Kosta Filinis, Cushman & Wakefield’s Director, Logistics & Industrial – Vic South East, said "In 2025, renewals dominated leasing activity as tenants opted to stay put rather than relocate, although demand for modern, efficient facilities remained strong. Interest in older secondary buildings was slower, but we continue to see multiple active briefs over 10,000 sqm in the South East, highlighting ongoing appetite for quality space.
“Looking ahead to 2026, vacancy is expected to remain tight and competitive, particularly for prime assets. The clear split between modern stock, which leases quickly, and older secondary stock, which requires incentives, will persist. 
“Face rents will continue nudging higher, with incentives doing more of the heavy lifting. A shortage of land and a strong pre-commitment pipeline will reinforce landlord-friendly conditions for quality assets."

Melbourne Office Leasing

According to Ben Ward, Cushman & Wakefield’s National Director & Head of Office Leasing Victoria, "The Melbourne CBD recorded a measured recovery in 2025. Vacancy remained elevated at about 17.9 per cent, but six-month net absorption turned modestly positive in mid-year, signalling a transition from the weakest phase of the cycle. Demand has been narrowly focused on premium-grade product, with premium rents recording steady uplifts even as incentives and outgoings remain relatively high. 
“Occupiers in cost-sensitive sectors are prioritising efficient floorplates and lower operating burdens, prompting landlords to deliver pragmatic upgrades and tenant-ready fit-outs rather than rely on headline incentives. 
 
“With completions modest in 2025 and the broader development pipeline set to moderate, availability of well-located prime floors should tighten and support a gradual strengthening through 2026. 

“Owners that prioritise targeted repositioning of secondary stock, tighter control of operating costs and adaptable, efficient floorplates will be best placed to convert enquiries into lettings. Tenants should take advantage of improving choice in modern, cost-effective space while continuing to align workplace strategy with operating efficiency as the market normalises”.

NEW SOUTH WALES

Sydney Capital Markets 

Steven Kearney, Cushman & Wakefield’s Head of Capital Markets, NSW, said “After significant office transaction activity in the Sydney CBD, 2025 was the year that buyers were returned to the wider metro market in NSW. 

As forecast at the end of 2024, a combination of lower borrowing costs and an adjustment of book values have led to improved liquidity throughout 2025. 

Buyers are confident that vacancy in leasing markets has peaked, and there is a strong narrative around stock withdrawals that will lead to future rental growth. 

Significantly, there has been capital raising by purchasers in notable transactions such as 100 Pacific Highway in North Sydney and 78 Waterloo Road in Macquarie Park. 

“We anticipate increased activity in 2026 as buyers face challenges finding value in the CBD, prompting capital to flow more aggressively into the broader metropolitan markets.”

Sydney Investment Sales

Matt Pontey, Cushman & Wakefield’s National Director & Co-Head, Investment Sales NSW, said in 2025, asset repricing brought opportunity back into focus. “As values reset, buyers and sellers began meeting in a more rational pricing environment, reigniting deal momentum. 

“We also saw private capital step up, with agile investors and syndicates re-emerging as dominant players, quickly capitalising on income-producing assets with strong fundamentals. High-quality lease profiles drove demand, as investors favoured assets with secure tenancy, strong WALEs, and essential service alignment. 

“Importantly, international capital returned with conviction, with offshore groups identifying Australia’s political stability, relative currency discount, and transparent market as a compelling re-entry point. Debt markets also steadied, with improved lending clarity and compressed risk premiums fuelling transaction volumes in the back half of the year.”

Miron Solomons, Cushman & Wakefield’s National Director & Co-Head, Investment Sales NSW, said looking ahead to 2026, stabilisation is creating confidence. “The market is entering a more balanced phase, with clear interest rate signals and re-aligned vendor expectations setting the stage for continued recovery. 
“We expect selective yield compression as capital returns and fewer distressed sellers remain in play, meaning high-quality assets in prime locations could see pricing firm through the year. The flight to quality will continue, with investors focused on strong tenant profiles, low capex exposure, and durable income, but with growing appetite for assets offering repositioning potential or structured upside. 
“Capital sources are diversifying, with strong participation from both offshore and domestic investors deploying patient capital for yield and long-term value. Office and retail are also finding their footing, as well-located experiential retail and adaptable office assets are being actively reassessed as yield opportunities. Ultimately, the key driver in 2026 will be liquidity. With rate cuts expected and confidence returning, we anticipate deeper capital pools, more competitive bid processes, and a strong rebound in transaction volume.”

Sydney CBD Office Leasing

Tim Stanway, Cushman & Wakefield’s National Director, Head of Office Leasing NSW, said the Sydney CBD experienced a measured recovery in 2025, marked by a steady re-centring of occupier demand towards core precincts. 

“Larger occupiers increasingly seek high quality, contiguous floors that support collaboration and workplace experience, and return to office policies have not been uniform across sectors or precincts. 

“As a result, demand has concentrated in premium stock and occupiers have been relocating from secondary space into prime floors that offer superior amenity and connectivity. Landlords are accelerating practical upgrades, reconfiguring floorplates and offering turnkey fit-out solutions to meet occupier requirements rather than relying on headline incentives.

“Developers have become more cautious about speculative supply, moderating near-term completions and tightening the pipeline for prime product. That dynamic has reinforced the flight to quality and underpinned stronger leasing momentum for well positioned buildings, while secondary stock remains challenged. 

“Looking ahead to 2026, the balance is expected to shift further in favour of prime assets. Landlords that prioritise building performance, adaptable floorplates and tenant experience will be best placed to retain and attract larger occupiers, and tenants should plan leasing programmes accordingly.”

South Sydney Industrial 

Tom Barnier, Cushman & Wakefield’s Director, Joint Head of Brokerage – Logistics & Industrial, Sydney South, said “The trading environment for occupiers across South Sydney remained challenging in 2025, especially for larger occupiers who are more exposed to discretionary spending patterns. As a result, the vacancy rate has been largely maintained throughout the year at around 4.0%.

“Looking ahead to 2026, conditions are expected to improve as early economic green shoots become more visible. Consumer spending is strengthening, and container movements through Port Botany have risen by 6.6% over the past year, signalling healthier throughput for trade-exposed industries. With limited new supply, vacancy rates are likely to come under downward pressure.

“Rate cuts recorded through 2025 are having a positive impact on liquidity within the investment market, which, in tandem with an improvement in the weight of capital chasing stock, is supporting yield compression. This positive momentum is expected to remain in 2026.”

Western Sydney Industrial 

Carl Pearce, Cushman & Wakefield's Head of Logistics & Industrial Brokerage for Western Sydney, said "Occupier sentiment continues to improve following a patchy first half of 2025, supported by stronger consumer spending fundamentals. 

“While occupiers remain cautious and cost sensitive, we are seeing businesses take a more proactive approach in the leasing market, with a growing focus on consolidation, flight to quality and operational efficiency.

“Gross leasing volumes for 2025 are on track to exceed 1.2 million sqm, underpinned by deal activity at the larger end of the market. However, vacancy rates are forecast to trend higher in 2026, driven by further speculative development completions and availability of backfill leasing options. 

“The thinning of the supply pipeline from 2027 provides a window of opportunity for occupiers before market conditions tighten”.

QUEENSLAND

Queensland Commercial Sales

According to Daniel Cullinane Cushman & Wakefield’s National Director & Head of Investment Sales, Queensland said “Regional investment markets are continuing to demonstrate resilient and accelerated performance, supported by affordability, infrastructure improvements, population inflows, and diversified local economies. We’re seeing investor activity driven by value re-rating potential and yield compression compared to metropolitan benchmarks, positioning these markets as a core allocation rather than a peripheral strategy.

“Assets backed by high-calibre tenants on long WALE profiles remain the most sought-after segment of the market. Investors are prioritising income security, covenant strength, and predictable cash flow in an environment where capital preservation and risk-adjusted returns are paramount. This flight to quality is particularly evident across essential services sectors such as healthcare, fuel, fast food, childcare, and large-format retail.

“Elevated construction costs and input volatility continue to constrain new project feasibility across multiple asset classes. While some moderation has occurred, labour shortages, materials pricing, and compliance costs are elongating development timelines and compressing margins. As a result, well-located existing assets with secure income profiles are attracting renewed attention as a lower-risk alternative to new construction.

“There is a clear and sustained capital migration from Victoria into Queensland, driven by superior economic fundamentals, stronger population growth, infrastructure investment, and favourable tax and regulatory settings. Both private and institutional capital are reinforcing this trend, firmly positioning Queensland as one of the most attractive risk-adjusted investment destinations nationally.

“In response to macroeconomic uncertainty and higher cost of capital, investors are shifting towards defensive acquisition strategies focused on long-term income durability rather than short-term capital arbitrage. Assets offering inflation-linked escalations, low management intensity, and non-discretionary tenant demand are commanding heightened competitive tension.”

Queensland Industrial 

Morgan Ruig, Cushman & Wakefield’s Director & Head of Industrial Brokerage, Queensland, said “Brisbane continued to punch above its weight on the demand front in 2025, with the strongest net absorption of any city nationally for the year. 

“As a result, downward pressure on the city's vacancy rate has been recorded, particularly in the South submarket, where the bulk of vacant floorspace has been located.
 
“Looking ahead, a 50% reduction in the speculative pipeline is expected over the next two years when compared to 2024 and 2025 levels. This lower level of supply is expected to place additional upward pressure on rents, particularly on an effective basis, as incentives gradually recalibrate.
 
“Land continues to be actively sought, particularly across the city’s key logistics corridors. With limited serviced and development-ready land available, competition is expected to remain elevated, and strategic land banking is likely to play a more prominent role over the next 12 months.
 

WESTERN AUSTRALIA

Perth Capital Markets

Nick Charlton, Cushman & Wakefield’s Director and Joint Head of Capital Markets, WA, said "2025 was a year of contrasts for the WA market. We saw a significant volume of office listings come to market, but performance was mixed as investors remained cautious in the face of economic uncertainty. In comparison, retail assets and development land continued to attract strong interest, with competitive bidding evident across multiple campaigns. 

“This resilience highlights the confidence in sectors underpinned by consumer demand and long-term growth fundamentals."
 
Ben Younger, Cushman & Wakefield’s Director, Joint Head of Capital Markets, WA, said "Looking ahead to 2026, we expect continued office offerings but anticipate a strong rebound in investor interest in Perth, driven by major lease transactions that will reshape vacancy rates in premium and upper A-grade assets. 

“Retail will remain robust as capital chasing opportunities far exceeds available stock, and development sites should continue to trade well. Despite escalating construction costs, strong demand for residential housing will underpin appetite for well-located sites.

Perth Industrial

Nick Goodridge, Cushman & Wakefield’s National Director Head of Industrial & Logistics - WA, said “The Perth industrial market has continued to tighten through 2025, with the metropolitan vacancy rate contracting to 2.5% as at Q3. The bulk of remaining vacancy is now concentrated in larger format facilities, while availability in the 3,000–6,000 sqm range remains exceptionally constrained.

“Market conditions for occupiers seeking 4,000–6,000 sqm facilities are particularly challenging. Deep levels of demand in this size bracket, combined with a sustained shortage of quality mid-sized assets, are driving elevated competition for space and accelerating decision-making cycles. As a result, many tenants are increasingly exploring pre-lease and design-and-construct pathways to secure future accommodation.

“While larger, prime-grade facilities continue to offer some optionality across core precincts, the broader supply outlook remains tight. Core land opportunities are scarce, and reduced speculative development is limiting the pipeline of new space. 

“This imbalance between supply and demand is expected to persist into 2026, reinforcing upward pressure on rents and requiring occupiers to remain disciplined, agile, and prepared to act decisively when both on- and off-market opportunities emerge.”

Perth Office Leasing

According to Roly Egerton-Warburton, Cushman & Wakefield's National Director, Head of Office Leasing, WA, "2025 was a year of adjustment for Perth’s office market, with vacancy temporarily elevated due to new supply, peaking at 17.0% in July. 

“However, this is already lagging reality, as enquiry levels remained solid throughout the year and accelerated in Q4, signalling tightening conditions ahead. Major transactions, such as NRW Holdings relocating from the metro market to the CBD, delivered significant net absorption, including 8,000 sqm in that deal alone.
 
“Despite new supply (35,711 sqm added in the first half of the year), including Nine The Esplanade, which is now close to fully leased, rental growth was observed across all grades, and incentives held steady.
 
“Looking ahead to 2026, with no new supply pipeline, vacancy rates are expected to decline, rents will accelerate, particularly for premium-grade assets, and incentives will begin to pull back as competition for prime space intensifies. Tightening conditions, rising rents, and reduced incentives point to a clear shift towards a landlord-favoured market."

SOUTH AUSTRALIA

Adelaide Investment Markets

Jack Dascombe, Cushman & Wakefield’s Senior Executive, Investment Sales – SA said “The 75 basis points of cash rate cuts this year have expanded the financing capacity of investors. We’ve seen the flow-on effects, with more purchasing requirements for high-value assets, increasing amounts of unallocated capital looking for placement, and yield compression among top-quality assets. 

“Economic uncertainty has again been a major talking point, as it was in 2024, leading to an even greater societal focus on key economic figures such as CPI, wages, unemployment, GDP growth and international affairs; all of which play a significant role in buy and sell decisions.
 
“SA’s growth shows no signs of slowing. Adelaide’s significant pipeline of residential development, with projects like Southwark Grounds, The Gasworks Brompton, City East, Forestville and Market Square representing more than 3,300 dwellings, is testament to our growing economy. 

“This growth narrative is supported by the latest RLB Crane Index, which shows Adelaide has surged to its highest number in history, sitting above Sydney, Melbourne, Brisbane and Perth, demonstrating the confidence in our state from both SA and interstate operators.
 
“While no one knows the future and anything can change, the broad expectation is that there won’t be any cuts to the cash rate for some time. Given this, in 2026 I believe investors, particularly investment managers, will become even more creative in their acquisitions, as the market’s requirement for strong returns and diversification grows stronger than ever. Data centres, medical and healthcare, and PBSA are key examples where the Adelaide market has plenty of room for continued growth.”

Adelaide Office Leasing

Adam Hartley, Cushman & Wakefield’s Managing Director & Head of Office Leasing – SA said “The South Australian office leasing market experienced a dynamic year in 2025, marked by sustained tenant relocation activity and a continued focus on quality. Enquiry levels remained strong as businesses refined their workplace strategies to balance hybrid working models with the need for collaborative, well-designed office environments. With increased net absorption due to the lack of new supply, the vacancy rate continued to reduce falling to 15.0%
“Smaller tenants dominated the market, with approximately 80% of relocations involving spaces under 500 sqm. Pre-fitted offices and speculative suites continued to lead demand, offering cost and time efficiencies that resonated strongly with businesses seeking agility. Larger occupiers leveraged competitive incentives on backfill stock throughout 2025, while those with requirements exceeding 1,000 sqm increasingly targeted new developments featuring premium amenities and ESG credentials to align with corporate sustainability goals.

“Looking ahead to 2026, we expect these trends to persist, with smaller tenants maintaining their preference for turnkey solutions and larger organisations gravitating towards high-performance, future-ready buildings. Renewed confidence in the market, supported by easing economic pressures and potential interest rate cuts, could further stimulate relocation activity.

“As tenant priorities continue to evolve, landlords will need to remain agile, delivering spaces that combine flexibility, quality, and sustainability to meet the demands of an increasingly competitive leasing environment.”