The conclusion of 2024 saw a flurry of investment activity across the larger end of the market, with portfolio sales, major data centres and office assets transacting, growing preliminary total commercial sales turnover for the year to $76.64 billion - a 19.2 per cent increase on 2023 results. While transaction numbers hit 11,694, this was well down on 2023's results where over 18,000 deals were recorded.

The average deal size in 2024 increased substantially to $6.38 million, compared to $3.42 million in 2023, reflecting stronger activity in the mid-market range, with private investors, syndicates and owner occupiers active in the sub-$20 million space.

New South Wales dominated investment activity, representing more than half of all transactions and recording a 59.8 per cent increase compared to 2023. This surge brought volumes back in line with 2022 levels, following a period where investors had sought higher-returning opportunities in Queensland and Western Australia.

Major CBD office buildings, data centres and shopping centres drove activity, with nearly 100 transactions exceeding $100 million, many completing in the final quarter of the year. This concentration of major sales highlights renewed institutional and offshore confidence in core markets.

Victoria's share of transaction activity declined to 20.6 per cent in 2024, down from 26.6 per cent in 2023 and 27.1 per cent in 2022. This reduction reflects growing investor concerns about legislative and taxation changes in the state. The dampening demand may continue to pressure yields upward, potentially creating improved opportunities in late 2025 as the market adjusts to these changes and investors seek value in this key market.

Queensland's traditionally strong 18-19 per cent share of investment saw interesting movement throughout 2024. While representing approximately 25 per cent of turnover in the first half of the year, late major sales in NSW reduced Queensland's final share to 14.8 per cent - a notable decline from previous years. Despite this, the state's strong population growth and infrastructure investment continue to attract investor interest, particularly in the south east corridor.

South Australia emerged as a strong performer, being the only state to grow its investment activity, up 4.9 per cent to $3.37 billion - its highest total since 2021. This growth was primarily driven by the retail sector, where annual volumes nearly tripled 2023 results, indicating renewed confidence in this asset class and the state's stable economy.

During the pandemic period, many investors speculated in smaller markets which saw growth in turnover and subsequent values in Western Australia, South Australia, Tasmania and Northern Territory. However, as market fundamentals reassert themselves, there has been a more considered risk analysis of assets with a notable swing back to the key population nodes in Australia.

Looking ahead to 2025, this flight to quality and population-driven markets is likely to continue. The return of institutional capital to major markets, particularly evident in the late-2024 surge in NSW activity, suggests growing confidence in core markets. Foreign investment could play an increasingly important role, with the Australian dollar trading at attractive levels making local assets appealing to offshore investors, particularly those from North America and Asia.

While opportunities remain in emerging markets where strong population growth and infrastructure investment create compelling investment cases, the focus will likely remain on core markets where scale and liquidity attract international capital. The key to success will be thorough due diligence and realistic return expectations, particularly as interest rates and broader economic conditions continue to evolve.

Related Readings 

Why investors are betting on alternative commercial over traditional asset classes - RWC | Commo.

Commercial property market: key trends shaping 2025 - RWC | Commo.

Top 5 commercial property trends for the remainder of 2024 - RWC | Commo.