The Tasmanian commercial property landscape continues to evolve, offering diverse opportunities across retail, office, industrial, and tourism sectors.

The 2024 Elders Commercial Market Report dives into key developments, transactions, and trends shaping these dynamic markets. Here’s a snapshot of what’s happening across the state:

Retail

The retail sector in Tasmania continues to demonstrate resilience, with a record high retail trade figure of $725.4 million in October 2024. 

“The southern region sees strong demand for non-discretionary tenants and bulky goods retailers, with notable developments like Spring Farm Village and Margate Shopping Centre.” said George Burbury, Commercial Sales & Leasing.

Major transactions include the $82.5 million sale of Channel Court Shopping Centre in Kingston.

In the north, properties under $1 million are achieving firmer yields due to increased buyer competition, while Launceston’s outer suburban precincts report mixed vacancy rates. Large format retail presents opportunities, although construction costs and limited space pose challenges. Developers are exploring adaptive reuse and creative solutions to meet demand.

Office

Hobart boasts the lowest capital city office market vacancy rate in Australia at just 2.8%, underscoring the strength of Tasmania’s office sector. Owner-occupiers are actively driving demand in the sub-$2 million market, while high-quality “A” grade office spaces are almost entirely leased.

“With no new developments currently under construction, the low vacancy rates are expected to persist for the foreseeable future which will continue to drive rental growth.”said Richard Steedman, Commercial Sales and Leasing.

The northern region shows high demand for smaller office spaces, prompting property owners to upgrade older stock to attract tenants. Meanwhile, notable transactions, like the $57.5 million sale of the Lands Building in Hobart, reflect growing investor confidence.

Industrial

Tasmania’s industrial sector remains strong, with notable activity across the state. In southern Tasmania, ongoing developments in Cambridge and Bridgewater/Brighton drive growth, while traditional hubs like Moonah and Derwent Park maintain robust leasing demand. Key transactions include competitive sales like 98 Mornington Road, which attracted national interest.

Northern Tasmania leads in demand, with developments at Launceston Airport and St Leonards addressing the need for warehousing. Properties under $2 million are particularly sought after by owner-occupiers and investors. The North-West industrial market is also thriving, with steady warehouse transactions and strong local participation, particularly from owner-occupiers.

"The industrial sector continues to be the strongest performer in the North West with a number of large sales and leasing deals being transacted.” said Nicholas Bond, Head of Commercial Sales North.

Tourism

Tasmania’s tourism sector has rebounded strongly post-pandemic, reaching 98.9% of pre-pandemic visitation levels and seeing a 40% increase in visitor spending compared to 2019. While hotel buyer demand has softened, motels are drawing significant interest, exemplified by the swift sale of the Fox and Hounds Inn.

“While buyer demand for hotels has softened, there has been a surge in inquiries for motel based asset sales. This trend is exemplified by the sale of the Fox and Hounds Inn, which transacted in just four weeks at the advertised sale price.” said Matthew Wallace, Commercial Sales and Leasing.

The sector’s outlook remains optimistic with the introduction of new Spirit of Tasmania ferries and potential direct flights from South-East Asia promising to boost international tourism.

Looking Ahead

The Tasmanian commercial property market presents a diverse landscape across the state, with varying trends and opportunities in different regions.

“With robust market fundamentals across all sectors and the likelihood of an interest cut, we move into 2025 with great optimism commercial property sector.” said Scott Newton, State Real Estate Manager Tasmania.

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Elders FY24 Tasmanian commercial market wrap up | Commo.