As Halloween approaches, we take a spine-tingling tour through Australia's commercial property landscape. From ghost offices to zombie retail and monster warehouses, each "room" in our house of horrors reveals the frightful (and sometimes fascinating) forces shaping the market.
The “Ghost Office” wing
Australia's CBDs remain haunted by the spirits of hybrid work. While Melbourne CBD leads the spectral parade with 17.9 per cent total vacancy and 1.2 per cent sublease space, the real ghouls haunt the suburban fringes. North Sydney's offices sit 21.7 per cent vacant with 1.6 per cent sublease, the highest phantom factor of any market. Macquarie Park follows closely at 22.2 per cent total vacancy, while Crows Nest/St Leonards posts a terrifying 29.7 per cent vacancy rate.
These aren't just empty desks, they're corporate ghosts, offices technically leased but sitting eerily empty as tenants desperately try to offload them. The sublease space represents the true haunting: companies paying rent on space they're frantically trying to escape.
But not all offices remain possessed. The great exorcism is underway, with newer ESG-certified buildings successfully banishing their spectres through flight-to-quality movements. Gleaming A-grade towers full of life while their aging B and C-grade cousins stand as hollow monuments to pre-pandemic work culture. Even Hobart CBD, with just 3.6 per cent vacancy, proves that the right location and building can keep the ghosts at bay.
The “Zombie Retail” basement
Unlike the abandoned mega-malls haunting American suburbs, Australia's retail zombies are more subtle, and perhaps more sinister. They're the strips with perpetual "For Lease" signs, the revolving door of cafes and boutiques that never quite make it, the undead retailers stumbling along with barely a pulse.
Walk down certain secondary strips and you'll spot them: the yoga studio that's somehow also selling homewares, the "pop-up" that's been there for three years, the cafe with Instagram-perfect fit-outs but mysteriously empty tables. These are retail's living dead, businesses clinging to life but not truly thriving.
Yet in true zombie fashion, some are being revived. Transit-oriented developments and strategic site amalgamations are breathing new life into select strips, while premium precincts and luxury locations continue to thrive, seemingly immune to the retail apocalypse. The question isn't whether retail is dead, it's which locations have the cure.
The “Construction Graveyard”
Perhaps the most haunting scene in our commercial property house is the construction graveyard. Stalled developments and industry insolvencies have left cranes frozen mid-air like skeletal remains dotting our skylines. The RLB Crane Index tells a grim tale of where projects have died, victims of rising costs, funding constraints, and economic uncertainty.
Site hoardings promise future office towers or residential developments, but the silence behind them is deafening. These are the ghosts of deals past, projects that looked brilliant on paper but couldn't survive the harsh light of 2025's economic reality.
The construction industry insolvency rate serves as our mortality metric, showing which cities and sectors are most afflicted by this commercial curse. For every ambitious development that rises from the ground, another lies buried in the graveyard of "what could have been."
The “Monster Industrial” warehouse
If there's a Frankenstein in this horror story, it's the mega-industrial shed. These enormous structures, some exceeding 100,000 sqm, are the true monsters consuming the landscape from Sydney's west to Melbourne's outer ring, Perth's expanding industrial zones to Brisbane's growth corridors.
Each state has spawned its own breed of monster. Western Sydney's industrial heartland continues its transformation from trough to expansion phase, with mega-sheds delivering positive capital returns and attracting cross-border investment. Meanwhile, Melbourne reigns as the data centre capital, hosting more of these windowless, power-hungry behemoths than any other Australian city. These digital monsters, with their massive cooling requirements and fortress-like facades, represent the most alien presence in industrial precincts.
Like creatures assembled from multiple parts, many of these monsters are created through site amalgamations, stitching together smaller lots to birth the mega-facilities that e-commerce and logistics giants crave. From cold storage facilities handling our online grocery orders to last-mile distribution centres ensuring next-day delivery, these monsters may look frightening, but they're the engines of modern commerce.
The twist in our tale? These monsters are the heroes, not the villains. They're what the market demands, what investors chase, and what's driving industrial real estate from its darkest trough into a bright expansion phase across the country.
“The Morning After”
As we exit our commercial property house of horrors, one thing becomes clear: not all these frights are bad omens. Some "monsters" are market necessities, some "zombies" are actually in transition, and some "ghosts" are making room for better-suited tenants.
The real horror would be a market with no movement, no change, no creative destruction. So as Halloween 2025 approaches, embrace the screams from Australia's commercial property landscape, they're the sound of a market very much alive, even if parts of it look decidedly undead.
Sweet nightmares, property professionals.
