22 Commercial property report. Australia’s commercial property market is starting to pick up pace, thanks to more stable interest rates and growing confidence among investors. Large investment groups and trusts have resumed buying, particularly in Sydney and Melbourne, with a focus on topquality buildings in prime locations. The office sector is seeing mixed results. The best buildings, those located in CBDs with modern features, strong environmental performance and good access to transport, are performing well. Many companies are choosing these high-end offices to attract staff and create productive, attractive workspaces. Older and less updated offices, particularly in Melbourne, are lagging. Melbourne CBD office vacancy rates, while stable at 18%, are the highest they have been since 1997, as businesses move in search of better facilities, highlighting changing expectations around workspaces as companies seek more from their environments. A similar pattern is evident in Sydney and Brisbane, where demand continues to centre around premium office spaces in key locations. Hybrid and remote work are now a normal part of business life. As a result, many companies are downsizing or redesigning offices to meet evolving needs. Flexible workspaces and coworking hubs, especially in fringe city areas and suburbs, are growing fast. There is increasing demand for professional workspaces that combine flexibility with features such as wellness initiatives, sustainable design and strong public transport links. For landlords, this means older buildings need upgrades to remain competitive. Some are being retrofitted to improve energy performance and functionality, while others may be converted into housing or mixed-use spaces where upgrades aren’t financially viable. Industrial property remains the market’s strongest performer. Online shopping, logistics improvements and reshoring of supply chains are driving demand for warehouses and delivery centres, evident in locations such as near the soon-to-open Western Sydney airport 60-64 The Corso, Manly, NSW With investor confidence growing, Australia’s commercial property market enters a new phase of opportunity and adaptation.
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