Australia was the sixth most active market globally for commercial real estate (CRE)  investment in 2024, according to Knight Frank’s The Wealth Report 2025, released today. 

The report found that globally CRE investment rebounded last year, rising by 8% to US$806 billion,  marking a significant recovery following the sharp 43% contraction recorded in 2023. 

Australia was the sixth most active market globally in 2024, up from ninth in 2023. Total volumes grew  by 57% in US dollar terms, reflecting a strong bounce back after a subdued 2023. 

Knight Frank Chief Economist Ben Burston said of the countries with the highest CRE investment  volumes over 2024, Australia saw the largest year-on-year increase by far. 

“Globally CRE investment saw a recovery in 2024, rebounding from the challenges of the previous  year,” he said. “The overall picture was one of economic resilience. The global battle against inflation  was ultimately won, with interest rates drifting downwards and many economies were navigating a soft  landing. 

“Australia came in ahead of South Korea, Canada, France and Spain in terms of commercial real  estate investment volumes over 2024, and recorded the strongest annual growth among the leading  markets. 

“Australia’s increase was partly due to improving sentiment and less uncertainty over the macro  outlook, with an increase in activity in each of the office, industrial and retail sectors, but it was also  boosted by the exceptional acquisition of AirTrunk by Blackstone and CPPIB. 

 “We expect continued momentum in 2025, with a further pick-up in activity in the office, retail, and  alternative sectors, although the volume of entity-level activity in data centres unlikely to be repeated. 

“The market is firmly in recovery mode, and while 2025 won’t be without its challenges, a significant  pool of capital is seeking deployment in Australia and additional interest rate reductions are likely to  buoy sentiment further as the year goes on.” 

Just as in 2023, Industrial was the most invested CRE sector globally, accounting for just over a  quarter of all global investment at US$216 billion. Living was close behind at US$205 billion, while  Office investment reached US$173 billion. Although the Industrial, Office, Hotel and Living sectors all  increased their share of total investment in 2024, Retail investment declined, its global share falling  from 18% in 2023 to 16%. Similarly, Senior housing & care shrank from 3% to 2%. 

In Australia, industrial was also the most invested sector in the CRE market over 2024, with US$15.9  billion, underpinned by significant activity in data centres, while office and retail volumes totalled $6.1  billion each. 

Knight Frank’s The Wealth Report 2025 found, via a survey of 150 family offices* that In Australia the  top three real estate sectors for investment moving forward are industrial (42%), data centres (21%)  and infrastructure (18%), compared to living sectors (14%), industrial/logistics (13%) and luxury  residential (12%) globally. 

Global cross-border capital regains momentum 

Global cross-border capital also regained momentum in 2024, rising 12% to $171 billion, underscoring  the return of global investor appetite.  

Australia was the fourth top investment destination for cross-border commercial real estate  investment, at US$12.8 billion, behind the UK (US$26.2bn), the US (US$24.5bn) and Japan  (US$15.4bn).

Sydney, meanwhile, was the second top metro destination for total cross-border investment in 2024,  with US$8.6 billion, behind London with US$9.6 billion. Melbourne was 9th, with US$2.6 billion. 

Investors from the US, Canada and the UK were the most active sources of cross-border capital in  2024. 

Who were the most active buyers? 

Globally private capital dominated CRE investment for the fourth consecutive year, contributing  US$360bn or 45% of total global investment volume, down slightly from 48% in 2023. Institutional  buyers were the second most active group, deploying US$268 billion, some 33% of the total. Private,  Institutional and Public buyers all recorded a rise in investment compared with 2023. Buyers in public  markets saw the largest rise, posting a year-on-year increase of 22% in 2024.  

In Australia, investment from private buyers totalled US$8.9 billion in 2024, representing 27% of total  activity, down from 36.7% in 2023. Cross-border investors were much more active in 2024, accounting  for 40.9% of total volumes, up from 27.5% in 2023.  

Data source: The above is based on Knight Frank’s analysis of RCA data and Knight Frank’s Research

More Knight Frank readings 

RBA’s decision to cut the official cash rate a turning point for commercial property markets - Knight Frank Australia  | Commo.

Time to buy commercial property before the recovery begins - Knight Frank | Commo.

Knight Frank unveils its top 7 predictions for the commercial property market in 2025 | Commo.