Perth’s commercial property market set for growth in 2025
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Photo by Sergey Guk
Perth’s commercial property market, particularly in the industrial and retail sectors, is poised for further expansion in 2025 after showing significant growth in 2024. This forecast comes from the Real Estate Institute of Western Australia’s (REIWA) latest WA Commercial Property Update, which highlighted a 15.1% increase in the median sale price per square metre across these sectors.
Market performance overview
REIWA’s Chief Executive Officer, Cath Hart, noted the robust performance of the industrial and retail sectors, despite the office sector’s more moderate growth. “The office sector saw moderate growth over the year, recording a 7.6% increase in its median sale price per sqm,” Hart explained. She anticipates price rises to continue into 2025, driven by a strong start in market activity and enquiries.
Industrial sector highlights
The industrial market in Perth saw its annual median sale price per sqm reach $2,605 by December 2024, marking a 15.1% year-over-year increase. The north-west subregion boasted the highest median sale price at $2,857, followed by the south-west subregion at $2,624. Despite a total of 1,016 industrial sales in Greater Perth, there was an 11% decline from the previous year, attributed to limited supply rather than diminished demand. “The greatest challenge has been new supply, with limited land for new development and construction costs hampering investment in building,” Hart said, noting that construction costs are stabilising.
Retail sector gains
The retail sector witnessed the largest increase in sales activity, with transactions rising by 27.5% to 195 sales in the year to December 2024. Hart suggested that this uptick in sales activity might reflect shifting investor interests, with some buyers exploring opportunities beyond the industrial market. The inner subregion led in sales numbers, followed by the south-west subregion. The annual median sale price per sqm in the retail sector soared by 15.1% to $4,928.
Office market trends
Although experiencing more moderate growth, the office market’s annual median sale price per sqm increased by 7.4% to $4,370 in 2024. The inner subregion recorded the highest median price, with the south-west subregion following. Notably, the inner subregion accounted for 45.1% of total office sales, with a 22% increase in transactions from the previous year.
Conclusion
As 2025 approaches, Perth’s commercial property market, especially within the industrial and retail sectors, is expected to continue its growth trajectory. With stabilized construction costs and increased land purchases by east coast developers, the market is likely to see new developments that could ease demand pressures. REIWA’s update underscores the dynamic nature of Perth’s commercial property landscape, highlighting opportunities for investors and developers alike.