Commercial trends point to a strategic shift in 2025

The commercial property market is entering a period of strategic change, with new trends reshaping investment opportunities across various sectors.  

Ray White Group head of research Vanessa Rader has identified several key trends that will influence the market in 2025, highlighting a shift away from traditional asset classes.  

“The retail sector is experiencing an unexpected resurgence, particularly in prime locations,” Ms Rader said. “Sydney’s CBD retail core exemplifies this trend, with 25 per cent of shops now representing high-end brands, challenging previous predictions about brick-and-mortar retail’s decline.”  

Ms Rader said there are changes in the industrial sector heading into 2025.  

“While headline vacancies remain low at sub 2 per cent, growing incentives and stabilising rents signal a cooling in traditional warehousing,” she said. “However, specialised assets like cold storage facilities and data centres continue to outperform, maintaining tight yields and attracting premium investment.”  

The office sector is undergoing significant changes, with CBD vacancies ranging from 9.5 per cent to 18 per cent.  

“Rather than viewing this as purely negative, we’re seeing innovative repurposing of office spaces, particularly in secondary markets,” Ms Rader said. “Premium and A-grade properties are attracting tenants through enhanced amenities and sustainability features, with ESG considerations increasingly driving occupier decisions.”  

According to Ms Rader, alternative assets are becoming mainstream commercial investments. “Childcare centres, medical facilities and service stations are now comparable to traditional asset types in terms of yields, growing increasingly attractive to institutional investors,” she said.  

Regional markets are also attracting renewed interest, with Queensland leading regional investment at over 40 per cent of total turnover. “Strong interstate migration, particularly to Queensland’s coastal markets, coupled with hybrid work arrangements, continues to reshape regional demand fundamentals,” Ms Rader said.  

The hospitality sector is showing promising signs of recovery, with recent transaction momentum exceeding long-term quarterly averages. “These assets attract investors through diverse revenue streams across food and beverage, gaming, accommodation and retail, with limited new supply maintaining their appeal,” she said.

*This information is general in nature and does not take into consideration your individual circumstances. Please contact us for further information.