Private investors are increasingly turning their attention to specialty commercial property assets, attracted by compelling defensive characteristics, structured rental growth, and long-term tenant security. This shift away from traditional commercial assets such as office, retail and industrial comes as investors seek to protect their portfolios from market volatility while capturing reliable income streams.

Childcare centres have emerged as a particularly attractive proposition, offering 15 to 20 year leases underpinned by government-supported income streams through the childcare subsidy scheme. With typical annual rental increases of around four per cent and strong operator covenants, these assets provide predictable cash flow growth that often outpaces traditional commercial property returns. The sector's resilience during economic downturns further enhances its appeal to yield-focused investors, however location and competition is key when selecting an investment.

Service stations and convenience retail assets continue to draw significant private capital, particularly those featuring major fuel operators on 15 to 20 year triple net leases. The evolution of this sector as EV use grows is towards broader convenience retail offerings has enhanced their investment appeal, while fixed annual increases provide built-in rental growth. Metropolitan locations with strong underlying land value offer additional long-term development potential increasing their appeal.

Fast food assets represent another growing segment, with national operators typically committing to 10 to 15 year terms. These assets benefit from turnover provisions and fixed escalations of around 3.5 per cent, providing investors with exposure to both guaranteed rental growth and business performance upside.

The healthcare property sector is another alternative asset type experiencing unprecedented demand from private investors, driven by aging demographics and the non-discretionary nature of medical services. Large-format medical centers and specialist facilities, typically secured by established healthcare groups on fixed terms, offer attractive returns with minimal landlord obligations.

While private investors dominate the sub-$50 million specialty sector, institutional capital is making significant moves into large-format alternative assets. Major players are particularly focused on data centres, with several REITs and superannuation funds committing to billion-dollar development pipelines to meet surging digital infrastructure demand. Cold storage facilities are attracting unprecedented institutional interest, driven by supply chain transformation, with assets typically trading above $100 million. Self-storage facilities have emerged as another institutional-grade sector, with major players acquiring platform-scale portfolios to capture rising urban storage demand and consolidation opportunities.

These specialty assets provide diverse opportunities across the investment spectrum, from manageable lot sizes suited to SMSF investors through to large-scale institutional platforms. The combination of long WALE, structured rental growth, and strong tenant covenants offers a compelling alternative to traditional commercial property investments in an evolving market landscape.

Related Readings 

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

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

​National Childcare Demand Sparks Investor Interest in Western Australia | Commo.

Unlocking the Potential: Early Education evolves into one of the top property investments in Australia | Commo.

CBRE Release 2024 Healthcare Report – The Year Of Increased Transactional activity | Commo.

Unprecedented Growth Trajectory for Australia’s Health Industry - Burgess Rawson Director Geoff Sinclair | Commo.