Australia's commercial property investment reshapes across states and sectors in 2025/26

Preliminary data on Australia's commercial property market activity recorded $87.82 billion in transactions during the 2025/26 financial year, a 25.7 per cent increase on the $69.85 billion transacted in 2024/25. This figure excludes the infrastructure play of data centre transactions competing within the industrial arena. The result confirms a market moving decisively out of the subdued conditions of the past two financial years, though the pace of that recovery has not been evenly distributed across either geography or asset class.

New South Wales remains the country's primary investment destination, attracting $34.49 billion in transactions and accounting for 39.3 per cent of national activity. This dominance is consistent with historic results, NSW has topped every state for each year on record, underpinned by Sydney's depth of institutional grade stock, its concentration of financial and professional services tenants and its consistent appeal to offshore capital. What has changed is the size of that lead. Back in 2018/19, NSW commanded 44.9 per cent of national turnover. That share has steadily narrowed as capital finds a broader range of opportunities elsewhere, most notably in Queensland.

Queensland has been the standout performer in relative terms, lifting its share of national investment from 16.9 per cent in 2018/19 to 25.4 per cent in 2025/26, with transaction volumes reaching $22.33 billion this year. Brisbane's Olympic infrastructure pipeline, sustained interstate migration and comparatively attractive entry pricing relative to the southern capitals have all played a role in drawing both institutional and private capital north. Victoria, while still the third largest market at $20.63 billion, has seen its share slip from a high closer to 30 per cent in earlier years, a trend that reflects the uncertainty across the local economy and additional cost that state's tax settings continue to introduce for buyers weighing up their options.

The outcomes of the smaller markets of Western Australia, South Australia, the ACT and Tasmania are also noting. Western Australia has recorded steady long-term growth in its share of national investment, climbing from 5.8 per cent in 2018/19 to a decade high of 7.1 per cent in 2024/25 as investors sought exposure to the state's economy beyond resources. That share eased back to 5.1 per cent in 2025/26, with $4.49 billion transacted for the year, though the underlying growth trajectory over the medium term remains intact as Perth's industrial and retail markets continue to draw interstate and offshore capital as well as opportunistic buyers in the office sector.

South Australia has followed a similar long-term pattern, its share of national turnover rising from 2.8 per cent in 2018/19 to a peak above 5.5 per cent in 2020/21 before settling near 4.7 per cent in 2025/26, with $4.13 billion changing hands this year. Adelaide's office market has been one of the standout performers nationally over this period, with infrastructure investment and a comparatively tight supply pipeline supporting occupier demand, a dynamic increasingly reflected in investor appetite for the state more broadly and one that should continue to underpin transaction activity as confidence builds.

The ACT's share of national activity peaked at 2.5 per cent in 2022/23 before easing to 1.1 per cent in 2025/26, with $967 million transacted. Canberra's office market remains closely tied to public sector occupier demand, and the softer result this year reflects the more cautious approach investors have taken toward government leased assets amid ongoing uncertainty around departmental space requirements.

Tasmania's transaction volumes have settled well below the exceptional $1.12 billion recorded in 2021/22, when the state's share of national turnover briefly touched 1.0 per cent on the back of strong pandemic era demand for regional and lifestyle assets. Volumes have since normalised to $526 million in 2025/26, representing 0.6 per cent of national activity, in line with the state's smaller economic base and naturally thinner transaction market.

On asset class, industrial retained its position as the most heavily traded sector, with $28.34 billion changing hands, representing 32.3 per cent of total turnover, up from 31.0 per cent the previous year. This continues a decade long trend of industrial steadily expanding its share of the investment market, from just 18.3 per cent in 2018/19. What is notable this year is the breadth of the buyer pool. Sub $5 million industrial units continue to attract private investors and self-managed super funds drawn to owner-occupier demand and low maintenance profiles, while institutionally owned logistics facilities in excess of $50 million have found ready buyers among superannuation funds and offshore capital seeking exposure to Australia's supply constrained warehousing market. Few other sectors can claim that same depth of participation across the entire pricing spectrum.