Commercial property investment rebounds to $16.2bn
Major self-storage and hotel acquisitions helped lift Australian commercial property investment to $16.2 billion in the second quarter of 2026, but the recovery remained uneven across sectors.
Cushman & Wakefield’s Australia Capital Markets MarketBeat report recorded a 70% increase in transaction volumes from the previous quarter and a 38% rise on a year earlier. Rolling annual investment reached $63.7 billion.
Despite that improvement, the report found buyers remained selective. Assets with dependable income attracted capital, while properties carrying substantial leasing or capital expenditure risks remained harder to sell.
Offshore capital targets alternative assets
Foreign investors contributed $8.0 billion, representing 49% of quarterly activity. Their investment increasingly focused on alternatives, while domestic buyers continued to support office, retail and industrial transactions.
Alternative property investment totalled $9.4 billion, the largest sector contribution. Brookfield and GIC’s acquisition of National Storage REIT, valued at approximately $6.7 billion, was the leading transaction.
Other activity included the Novotel and Ibis Sydney Darling Harbour transaction and the hotel component of the Paradise Centre and Novotel Surfers Paradise sale. Cushman & Wakefield stressed that several large transactions had magnified the result; the increase did not represent equivalent gains across every alternative subsector.
Industrial recovery contrasts with softer office activity
Logistics and industrial investment recovered to $3.0 billion after a quieter first quarter, remaining above long-term quarterly averages. That figure excludes the Goodman/Soul Patts recapitalisation and Goodman’s divestment of Moorabbin Airport.
The report linked demand to resilient occupier markets, limited availability of institutional-grade properties and confidence in future income growth. Significant sales included 24 Markwell Street in Bowen Hills, which Charter Hall bought from Sonic Healthcare for $445 million.
Retail investment reached $2.1 billion. Although below the first-quarter result, activity remained above historical averages. Institutions continued to target larger shopping centres, while private investors favoured neighbourhood and convenience centres.
Office investment was weaker at $1.7 billion, below both the preceding quarter and the same period in 2025. The report attributed this partly to limited institutional-grade stock and several larger transactions settling after the quarter ended.
The $558 million acquisition of 100 Mount Street in North Sydney led office activity. Secondary properties, by contrast, continued to need more competitive pricing or a clear plan for repositioning the asset.
More deals, but buyers remain selective
The report’s transaction analysis recorded 490 deals, compared with 298 in the previous quarter. Average deal size fell from $36 million to $33 million, reflecting increased activity among smaller and mid-market assets alongside major institutional transactions.
For the second half of 2026, Cushman & Wakefield expected improving pricing certainty, greater liquidity and more institutional opportunities to support investment. It also anticipated stronger office activity as larger deals completed, while noting that quarterly totals would remain sensitive to transaction timing.
Its office outlook favoured prime central business district and metropolitan assets, with value-add transactions continuing where prices reflected leasing and capital expenditure risks. More broadly, the report expected property fundamentals to become increasingly important as financing conditions stabilised, despite ongoing economic and geopolitical uncertainty.
SOURCE ATTRIBUTION:
Based on reporting by Cushman & Wakefield in MarketBeat: Australia Capital Markets, Q2 2026.
