As 2025 begins, the commercial property market is demonstrating solid momentum, with investor confidence remaining high. Burgess Rawson has already secured $60 million in transactions leading into 2025, reflecting strong market demand.

Australia’s commercial property market is entering a phase of renewed stability and optimism. Following recent times of uncertainty, key indicators such as inflation and interest rates are showing signs of steadying, creating a more predictable environment for investors and businesses alike.

We saw this momentum occur in the second half of last year, where record prices and yields were achieved. Burgess Rawson played a pivotal role in driving the commercial property market’s momentum, securing an impressive $1.6 billion in transactions across a diverse range of assets and record yields as sharp as 2.97 per cent.

The prospect of lower interest rates looms large as a potential catalyst for market activity this year. With inflation stabilising and the Reserve Bank of Australia indicating a pause or even cuts to rates, borrowing costs may ease, making it more attractive for buyers to re-enter the market. This shift will bolster competition for premium assets, particularly in sectors offering long-term security, particularly early education, fast food, convenience and large format retail, health and industrial assets.

Inflation, which had been a source of pressure on operational costs of some businesses, now appears more contained. This stability is creating a clearer framework for decision-making among investors and tenants. Predictable expenses encourage businesses to commit to longer-term leases, while investors can better assess returns with reduced risk of sudden cost escalations.

The rising demand for logistics hubs and distribution centres remains a driving force for industrial assets, particularly those located near key transport routes. Convenience retail assets, including fast food franchises, and childcare centres also remain highly sought after, benefitting from the ongoing need for essential services. These types of assets are proving resilient in regions across the nation, as both urban and suburban areas experience population growth and increasing demand for essential services.

While global economic uncertainty may persist, the fundamentals of Australia’s commercial property market remain robust. Stabilising inflation, the potential for lower interest rates, and strong national demand for recession-proof assets are setting the stage for a year of progress and continued strength in investment confidence across the country.