Sydney's commercial property market is attracting record institutional investment as office vacancy rates stabilise and industrial demand surges.
The Business Desk is a contributing writer covering business and public affairs for The Sydney Times.
Sydney's commercial property market is experiencing a divergence between office and industrial sectors, with institutional investors increasingly favouring logistics assets over traditional CBD office space. Total commercial property transactions in the first half of 2026 reached $4.2 billion, up 12 per cent year-on-year.
The office sector shows signs of stabilisation after two years of declining values. CBD office vacancy has plateaued at 14.3 per cent, according to the Property Council of Australia. However, premium-grade assets in the CBD continue to attract strong interest from offshore pension funds seeking stable yields.
Industrial property remains the standout performer. Demand from e-commerce and third-party logistics providers has driven Sydney's industrial vacancy rate to a record low of 1.8 per cent. Rental growth in the western Sydney corridor has exceeded 8 per cent annually over the past two years.
The Property Council of Australia publishes quarterly market data covering all commercial property sectors.
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