Commercial property rebounds as investors regain confidence.

Recent data shows overseas buyers have made a strong comeback, acquiring $7.4 billion worth of Australian commercial real estate in the first half of 2025, a 26% increase compared to the same period last year. Much of this activity has been led by American investors, drawn by Australia’s political and economic stability, a favourable exchange rate, and streamlined FIRB approval processes introduced in mid-2024.

While New South Wales continues to attract the lion’s share of offshore investment, savvy investors are looking more broadly, including to markets like Perth, which offers solid fundamentals and attractive value relative to the eastern states.

The RBA’s recent interest rate cuts have further strengthened the appeal of commercial property. As returns on cash-based investments decline, many yield-focused investors are rebalancing portfolios to include assets with more substantial income potential. Current gross rental yields average around 6.5% for retail, 5.5% for office, and just under 5% for industrial, outpacing term deposit rates, which are forecast to drop into the mid-to-high 3% range by the end of the year.

Industrial property has been a standout performer. Once considered the least glamorous asset class, it has surged in popularity since the COVID-19 pandemic, supported by e-commerce expansion, logistics demand, and low vacancy rates. Major institutional plays in the self-storage sector, including a $2.17 billion bid involving listed entities, reflect growing confidence in this space.

Retail property, which was once under pressure, is now showing signs of revitalisation. Limited supply and the rise of mixed-use precincts are driving renewed interest among investors. Meanwhile, the office sector, although still stabilising, is attracting value-driven buyers seeking prime CBD locations at pre-pandemic pricing, a rare opportunity in capital city markets.

Importantly, commercial property is no longer the exclusive domain of institutional players. A new wave of investors, including younger buyers and SMSF trustees, is entering the market. Rising residential property prices, along with tighter rental laws and lower net yields, are prompting many to shift capital into commercial assets. Unlike residential investments, commercial leases often pass outgoings onto tenants and offer higher net returns.

For self-managed super fund trustees and family offices, commercial property presents a compelling blend of income, capital growth, and long-term wealth planning. Popular strategies include purchasing premises through an SMSF and leasing them back to one’s own business, a structure that can deliver tax advantages and long-term security.

Of course, commercial property carries its own set of considerations. Banks typically require larger deposits and offer lower loan-to-value ratios than residential lending. GST is payable on purchases without an active lease in place. However, with professional guidance and a long-term perspective, commercial assets can provide consistent performance and portfolio diversification.

As this renewed wave of investment continues to build, it’s evident that commercial property is becoming a mainstream asset class, not just for institutions, but for a wide range of private investors. In Perth, substantial infrastructure investment, population growth, and economic diversification are creating favourable conditions for sustained market confidence.

At Norfolk Commercial, we’re seeing this evolution first-hand. We specialise in providing professional, personalised commercial property sales services to a diverse clientele, including sophisticated investors, SMSF trustees, family offices, commercial property syndicates, and institutional investors. Our goal is to maximise your returns and ensure a seamless transaction process, drawing on our deep understanding of Perth’s most vibrant and tightly held commercial precincts.

With a reputation built on discretion, diligence, and insight, Norfolk Commercial continues to serve as a trusted adviser to some of Perth’s most experienced and forward-thinking commercial property investors. Whether you’re looking to diversify your portfolio, invest through a super fund, or identify your next high-performing asset, our expert team is here to help you navigate the market with clarity and confidence.