• 5 min read
TPA believes investing in commercial real estate is still a solid and somewhat recession-proof investment. The key is selecting the right investment at the right time and at an attractive price. With the market turning and interest rates looking to drop, TPA is active in the market seeking good buying opportunities. We’re not looking at development properties but rather sticking to our core—buying income-yielding properties with potential for capital appreciation.
For wholesale investors in Australia, certain commercial real estate asset classes present compelling opportunities. TPA will be focusing on the following asset classes in view of current market trends:
1. Industrial & Logistics
- Why it’s hot: The surge in e-commerce and the emphasis on supply chain resilience continue to drive demand.
- Trends: High occupancy rates and rental growth in hubs like Western Sydney, Melbourne’s west, and Brisbane.
- Investor focus: Last-mile delivery centres, distribution hubs, and refrigerated storage.
2. Premium Office Spaces (CBD and Fringe)
- Why it’s recovering: A ‘flight to quality’ trend is driving demand for A-grade and premium office spaces.
- Trends: Tenants are seeking sustainable buildings with amenities that attract staff back to the office.
- Investor focus: Refurbished or new offices with strong ESG (Environmental, Social, and Governance) credentials.
3. Healthcare Real Estate
- Why it’s booming: An ageing population and increased healthcare spending are creating resilience and growth.
- Trends: Medical centres, day hospitals, and allied health facilities are in demand.
- Investor focus: Properties with long-term leases to established healthcare operators.
4. Large Format Retail (LFR)
- Why it’s attractive: Demand for bulky goods and home improvement remains strong.
- Trends: Locations anchored by tenants like Bunnings and The Good Guys are highly sought after.
- Investor focus: Neighbourhood and convenience-based centres.
5. Build-to-Rent (BTR)
- Why it’s emerging: Housing unaffordability and rental shortages are attracting institutional interest.
- Trends: High occupancy in Sydney, Melbourne, and Brisbane.
- Investor focus: Long-term income streams and regeneration projects.
Summary
TPA will focus on sectors with strong demand drivers and resilient income. Industrial and logistics, premium office, education and healthcare real estate, and large format retail will be TPA’s core areas in 2025.
Commercial Real Estate vs Shares
Investing in either Australian commercial real estate or shares requires careful consideration of current economic conditions and market forecasts.
Commercial Real Estate
The Australian commercial property sector is showing signs of recovery in 2025. Agencies like CBRE anticipate a 15% growth in investment volumes, driven by lower interest rates and renewed purchasing by large institutions. Premium assets—particularly in Sydney’s CBD offices, logistics, and high-end shopping centres—are expected to perform well. Additionally, the anticipated easing of monetary policy is likely to create a more favourable environment for leveraged buyers, potentially driving increased competition for quality assets as debt costs moderate.