Commercial Property Research: Where to Invest in Australia

Introduction

Investing in commercial property can be a game-changer for your portfolio—offering higher yields, longer leases, and diversification away from residential markets. But with so many options across Australia, how do you know where to invest?

This guide dives deep into commercial property research in Australia, highlighting the best sectors, locations, and strategies for 2024-2025. Whether you’re a seasoned investor or just starting, we’ll help you make data-driven decisions.

For expert-backed insights, explore Real Estate Science Fund’s commercial property portfolio.

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Why Invest in Australian Commercial Property?

Before jumping into locations, let’s look at why commercial real estate is worth considering:

✅ Higher Rental Yields (5-10% vs. 2-4% for residential)
✅ Longer Lease Terms (3-10 years vs. 6-12 months for residential)
✅ Inflation Hedge (Rent increases often linked to CPI)
✅ Diversification (Reduces reliance on residential market cycles)

However, commercial property requires more due diligence than residential. That’s where commercial property research in Australia becomes crucial.

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Top Commercial Property Sectors to Watch (2024-2025)

1. Industrial & Logistics Warehouses

Why? The e-commerce boom and supply chain resilience are driving demand.

Best Locations:

• Western Sydney (Aerotropolis, new transport links)
• Melbourne’s Outer North (Craigieburn, Truganina)
• Brisbane’s Trade Coast (Near port and airport)

Source: CBRE Industrial Market Report

2. Office Spaces (Flexible & Hybrid Workspaces)

Why? Companies are downsizing but still need premium, flexible offices.

Best Locations:

• Sydney CBD & Parramatta (Prime corporate demand)
• Melbourne’s Docklands (Tech and finance tenants)
• Brisbane’s Fortitude Valley (Growing startup hub)

3. Retail (Neighbourhood & Large-Format)

Why? Essential retail (supermarkets, pharmacies) remains stable.

Best Locations:

• Suburban shopping centres (High foot traffic areas)
• Large-format retail (Bunnings, Officeworks-style tenancies)

4. Healthcare & Medical Centres

Why? Ageing population = growing demand for medical services.

Best Locations:

• Near hospitals (e.g., Westmead in Sydney)
• Affluent suburbs (High patient volumes)

5. Build-to-Rent (BTR) Developments

Why? Rising demand for long-term rental solutions.

Best Locations:

• Melbourne & Sydney (Government incentives available)

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How to Conduct Commercial Property Research in Australia

1. Market Reports & Data Sources

• CoreLogic Commercial (www.corelogic.com.au)
• CBRE Research (www.cbre.com.au)
• JLL Market Insights (www.jll.com.au)

2. Key Metrics to Analyse

✔ Vacancy Rates (Lower = better demand)
✔ Rental Growth Trends (3-5%+ is ideal)
✔ Yield Comparisons (Cap rates vs. interest rates)
✔ Infrastructure Projects (New roads, rail, airports boost value)

3. Local Council & Zoning Checks

• Is the area zoned for future growth?
• Are there development restrictions?

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Best Australian Cities for Commercial Property Investment

1. Sydney

✅ Pros: Strong tenant demand, high rental yields.
⚠ Cons: Expensive entry point.
Best for: Office, industrial, medical.

2. Melbourne

✅ Pros: Diverse economy, lower prices than Sydney.
⚠ Cons: Higher vacancies in some sectors.
Best for: Retail, BTR, office.

3. Brisbane

✅ Pros: Population growth, Olympics 2032 boost.
⚠ Cons: Cyclone risk in some areas.
Best for: Industrial, logistics.

4. Perth

✅ Pros: Cheap entry, mining sector support.
⚠ Cons: Volatile economy.
Best for: Industrial, healthcare.

5. Adelaide

✅ Pros: Stable yields, defence industry growth.
⚠ Cons: Smaller market.
Best for: Neighbourhood retail, medical.

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Risks & Challenges in Commercial Property

⚠ Economic Downturns (Tenants may struggle to pay rent)
⚠ Interest Rate Rises (Higher borrowing costs)
⚠ Tenant Reliance (Losing a major tenant can hurt cash flow)
⚠ Higher Maintenance Costs (Compared to residential)

Mitigation Strategies:

• Diversify across sectors
• Choose properties with WALE (Weighted Average Lease Expiry) of 5+ years
• Work with experts like Real Estate Science Fund

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Commercial Property Investment Strategies

1. Direct Ownership

• Buy a property outright (best for experienced investors).

2. REITs (Real Estate Investment Trusts)

• Invest indirectly via ASX-listed REITs (e.g., Goodman Group, Charter Hall).

3. Syndication & Joint Ventures

• Pool funds with other investors for larger assets.

4. Development Plays

• Buy land, develop, and lease/sell for profit.

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Final Verdict: Where to Invest in 2024-2025?

🏆 Best for Growth: Sydney Industrial, Brisbane Logistics
🏆 Best for Stability: Melbourne Neighbourhood Retail, Healthcare
🏆 Best for Yields: Perth Industrial, Adelaide Medical

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FAQs

Q: Is commercial property better than residential?
A: Depends on goals—commercial offers higher yields but requires more expertise.

Q: How much deposit do I need?
A: Typically 30-40% (banks see commercial as higher risk).

Q: What’s the best commercial property for beginners?
A: Single-tenant properties (e.g., medical centres) with long leases.

Q: Where can I find commercial listings?
A: CommercialRealEstate.com.au, RealCommercial.com.au

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Conclusion

Smart commercial property research in Australia involves analysing market trends, tenant demand, and economic factors. Whether you choose industrial, office, or retail, the key is due diligence and expert advice.

For tailored investment strategies, check out Real Estate Science Fund today.