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Australian commercial property investments in essential services showed remarkable strength throughout 2024, with significant growth across convenience retail, fast food, medical, and childcare sectors.
The Australian commercial property market demonstrated notable growth in 2024, with essential service sectors leading market performance. The average price for premium commercial assets reached $3.9 million, marking a 7 per cent increase from $3.64 million in 2023.
Convenience retail growth
The convenience retail sector emerged as a market leader in 2024. Transaction volumes grew by $45.5 million, reaching $178.2 million. The sector maintained stable yields at 6.38 per cent, with fuel stations generating steady cash flow which appealed to investors.
Fast food sector performance
Fast food properties saw increased competition in 2024. The sector maintained 16 transactions throughout the year, yet total sales volume increased from $70.5 million to $85.6 million. Yields contracted from 4.56 per cent to 4.32 per cent, signalling strong investor demand.
Medical property expansion
Medical properties recorded substantial growth in 2024. Sales volumes in this sector nearly doubled, reaching $178.8 million. The sector maintained consistent yields around six per cent, indicating ongoing investor confidence in healthcare assets.
Childcare sector stability
The childcare property sector attracted targeted investment throughout 2024. Returns averaged 5.44 per cent, with total sales of $217 million across 39 transactions. This performance demonstrated sustained interest in education-focused assets.
Market outlook
Burgess Rawson partner Matthew Wright noted continued investor confidence across main asset categories. “The data points emphasise a nuanced market in which essential service sectors remain highly attractive, with strategic investor interest varying by asset type,” Mr Wright said. “The yield compression paired with stable transaction rates indicates sustained demand for these recession-resistant and highly desirable assets.”
Further questions
What drives the strong performance of fuel station investments?
How does zoning affect medical property values?
What role do tenant quality ratings play in childcare property investments?
Why do fast food properties command premium prices?
What impact do interest rates have on commercial property yields?
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