Essential service properties lead commercial market surge
Commercial properties showed remarkable strength in 2024, with the essential service sectors driving significant growth across the Australian market.
New data from Burgess Rawson reveals that the average sale prices for premium commercial assets have increased by 7 per cent, reaching $3.9 million compared to $3.64 million in the previous year.
The convenience retail sector has emerged as a standout performer, with transaction volumes increasing by $45.5 million to reach $178.2 million in 2024.
Yields in this sector have stabilised at 6.38 per cent, with high levels of investor confidence in fuel stations, thanks to their reliable cash flow.
Fast food properties have become increasingly competitive, with yields tightening from 4.56 per cent to 4.32 per cent. Despite maintaining 16 transactions, the sector has seen sales volume grow from $70.5 million to $85.6 million.
The medical property sector has also experienced solid growth, with sales volumes nearly doubling to $178.8 million, while the sector maintained steady yields around six per cent.
Childcare properties continue to attract selective investors, with returns averaging 5.44 per cent and total sales reaching $217 million across 39 transactions.
Burgess Rawson partner Matthew Wright said investor confidence remains strong across key asset classes.
“The data points emphasis a nuanced market in which essential service sectors remain highly attractive, with strategic investor interest varying by asset type.” Mr Wright said. “The yield compression paired with stable transaction rates indicates sustained demand for these recession-resistant and highly desirable assets.
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