The Perth commercial property market continues to show strong performance, with the industrial sector leading the charge in price growth. According to REIWA’s September Commercial Property Update, the industrial market has seen impressive gains, driven by high demand and limited supply.

Industrial Sector Highlights:

• Price Growth: The median sale price per square meter for industrial properties reached $2,500 in September 2024, a significant 12.1% increase year-on-year.
• Strong Demand: Owner-occupiers and investors are actively competing for industrial properties, particularly smaller lots and urban infill subdivisions.
• Supply Challenges: Despite strong demand, supply remains constrained, with most new land releases situated on the outskirts of Perth.
• Top Performing Sub-regions: The North West and Inner sub-regions recorded the highest median sale prices per square meter, exceeding $2,800.

Office Sector Performance:

The office market also demonstrated robust growth, with the median sale price per square meter reaching $4,408 in September 2024, a 7.6% increase year-on-year.

• Medical Office Demand: Strong demand for medical office spaces, driven by Perth’s aging population, has contributed significantly to the sector’s growth.
• Inner Sub-region Dominance: The Inner sub-region recorded the highest median sale price per square meter and accounted for nearly half of all office sales.

Retail Sector Growth:

The retail sector experienced the most substantial growth in sales volume, with a 40.6% increase year-on-year.

• Investor Confidence: Investors are showing strong interest in retail properties, particularly those leased to national brands on long-term agreements.
• Price Appreciation: The median sale price per square meter for retail properties reached $4,725 in September 2024, a 10% increase year-on-year.
• Inner Sub-region Leads: The Inner sub-region recorded the highest median sale price per square meter and led in sales volume.

REIWA’s Advocacy for a Balanced Market:

REIWA emphasizes the importance of a balanced commercial property market that caters to the needs of both landlords and tenants. In light of the State Government’s recent review of the Commercial Tenancy (Retail Shops) Agreements Act 1985, REIWA is actively advocating for:

• Protection for Smaller Landlords: Ensuring that new compliance obligations do not disproportionately burden smaller landlords, particularly those outside major shopping centers.
• Support for Tenants: Maintaining support for tenants in navigating lease agreements and understanding their rights.
• Flexibility for Landlords: Preserving flexibility for landlords, especially in challenging economic times.

REIWA encourages all stakeholders – landlords, agents, and tenants – to engage with them and provide feedback ahead of the consultation period next year. This collaborative approach will help shape a fair and thriving commercial property market in Western Australia.