AirTrunk sale boosts Australian commercial investment to sixth most active globally – report
Despite tougher financing conditions, the Australian commercial real estate investment market was the sixth most active globally last year, boosted by the exceptional acquisition of AirTrunk by Blackstone and CPPIB, according to a new report.
Australian investors left their mark in 2024, leaping to sixth place from ninth in 2023, according to Knight Frank’s The Wealth Report 2025, released today.
Across the nation, commercial real estate (CRE) investment volumes rose by 57 per cent in US dollar terms, it found.
Across the world, commercial real estate investment rebounded last year, rising by 8 per cent to $US806 billion, marking a significant recovery following the sharp 43 per cent contraction recorded in 2023, the report stated.
Which commercial sector did the best?
In Australia, industrial came up trumps as the most invested-in sector of the commercial real estate market in 2024, totalling $US15.9 billion, while office and retail volumes rang in at $US6.1 billion each, it found.
Australia also proved to be a hotspot for cross-border commercial investment in 2024, coming in fourth place globally at $US12.8 billion, behind the UK ($US26.2 billion), the US ($US24.5 billion) and Japan ($US15.4 billion).
When further breaking down the investment to the city level, Sydney triumphed over all other Australian cities.
It came second among the top metro destinations for total cross-border investment in 2024, attracting $US8.6 billion, behind London with $US9.6 billion. Melbourne came in at ninth place, with $US2.6 billion.
Australia gains largest year-on-year growth globally
Knight Frank chief economist Ben Burston said that, of the countries with the highest commercial real estate investment volumes last year, Australia saw the largest year-on-year increase by far.
“Globally, CRE investment saw a recovery in 2024, rebounding from the challenges of the previous year,” he said.
“The overall picture was one of economic resilience. The global battle against inflation was ultimately won, with interest rates drifting downwards, and many economies were navigating a soft landing.
“Australia came in ahead of South Korea, Canada, France and Spain in terms of commercial real estate investment volumes over 2024, and recorded the strongest annual growth among the leading markets.
“Australia’s increase was partly due to improving sentiment and less uncertainty over the macro outlook, with an increase in activity in each of the office, industrial and retail sectors,” Burston added, “but it was also boosted by the exceptional acquisition of AirTrunk by Blackstone and CPPIB.
“We expect continued momentum in 2025, with a further pick-up in activity in the office, retail, and alternative sectors, although the volume of entity-level activity in data centres is unlikely to be repeated.”
Burston said the market was firmly in recovery mode and still faced headwinds.
“While 2025 won’t be without its challenges, a significant pool of capital is seeking deployment in Australia, and additional interest rate reductions are likely to buoy sentiment further as the year goes on,” he said.
