As investors await a more definitive signal on capital allocation for 2026, the landscape appears to be clarifying. With markets contending with elevated borrowing costs, investment opportunities are becoming more concentrated, particularly in regions supported by robust infrastructure, population growth, and supply constraints. According to Rethink Group, investor focus is shifting towards specific areas such as Brisbane and South East Queensland, where opportunities are influenced by major initiatives like the Brisbane 2032 Olympic and Paralympic Games.
Reports from renowned market analysts such as JLL, CBRE, and Cushman & Wakefield highlight persistently tight industrial conditions in pivotal Australian markets. There’s a burgeoning confidence in Brisbane, fueled by significant investments in infrastructure and venue development linked to the upcoming Olympics. These investments are anticipated to drive commercial rents and land values in growth areas, offering potential upside for industrial assets, which are thriving due to demographic trends and logistical demands.
Melbourne, often viewed cautiously by investors, is aligning with trends that generate interest, particularly in its western and northern industrial corridors. Despite higher vacancies than in some capitals, Melbourne’s industrial market shows promise due to strong freight demand and proximity to the Port of Melbourne. Essential retail is also capturing attention, drawing on reliable income streams while presenting more attractive entry points compared to Sydney.
Perth presents an interesting narrative, boasting Australia’s lowest industrial vacancy rates. Its limited supply continues to bolster rental prices, particularly in industrial zones associated with logistics, warehousing, and mining. As leasing conditions improve, the nuances of Perth’s retail landscape are becoming evident, turning it into a compelling market for astute investors.
Adelaide is slowly gaining traction among investors. Following years of being overlooked, the city is reaping rewards from defence-related activities and infrastructure investments. Its northern corridor’s industrial sections are witnessing upswings, with yield premiums compared to Sydney and Melbourne narrowing. If current demand holds steady against a backdrop of limited supply, further yield compression appears likely.
In contrast to the metropolitan hotspots, regional Queensland is emerging as a viable investment option, with towns like Mackay, Townsville, and Rockhampton appealing to those seeking value outside major cities. These regions are marked by attractive net yields and are supported by ongoing population growth and economic diversity.
Investors eyeing opportunities beyond Australia are starting to consider New Zealand, particularly Auckland and Christchurch. With the Reserve Bank of New Zealand’s official cash rate holding at 2.25% as of April 2026, the country offers a relatively lower-rate environment compared to Australia. This scenario is encouraging some investors to see New Zealand as a diversification avenue into an earlier-stage recovery in commercial property.
Furthermore, the standout asset classes for 2026 appear to be industrial and essential retail real estate. Demand for logistics, warehousing, and convenience-based spending positions these assets as prime targets in an environment with high interest rates and increased underwriting scrutiny. Although not every asset will perform uniformly, a prudent approach suggests that investors will hone their focus on specific suburbs and regions where demand is solid, vacancy rates are low, and income has an inherent defensive quality.
Current hotspots encompass Brisbane and South East Queensland, industrial zones in Melbourne, Perth’s logistics market, Adelaide’s evolving value proposition, select regional centres in Queensland, and a recovering New Zealand for the more exploratory investor.
In conclusion, the next wave of upside in commercial property may not materialise uniformly across the country but rather in areas where inherent fundamentals demonstrate strength. Investors who carefully navigate these emerging trends could realise substantial benefits in their portfolios.
