The Perth commercial property market is showing strong signs of growth, with the retail sector leading the charge in price increases over the year to March 2025. Our latest analysis, based on REIWA‘s March Commercial Property Update, reveals exciting trends across retail, industrial, and office spaces. Here’s a deep dive into what’s happening and what it means for investors and businesses.

Retail Roars Ahead: Investor Confidence and Population Growth Fuel Demand

The retail sector was the standout performer, boasting a remarkable 23.8% increase in its annual median sale price per square meter, reaching $5,238. This represents a significant 6.3% jump from the December 2024 quarter, indicating strong momentum.

What’s driving this growth?

According to REIWA President Suzanne Brown, a renewed sense of investor confidence is a key factor. “We’re seeing a diverse range of investors turning their attention to retail,” Ms. Brown noted, adding that rising prices and reduced yields in the industrial sector are making retail an increasingly attractive option.

We’re also observing increased interest from Eastern States investors who recognize the value proposition in Perth compared to Sydney and Melbourne. However, it’s important to note that while optimism is high, investors remain discerning, prioritizing properties with strong, established tenancies.

Furthermore, Western Australia’s robust population growth is providing a solid foundation for the retail market. “More people mean more customers for existing businesses and a greater influx of entrepreneurs looking to establish their own ventures,” explained Ms. Brown. This dual impact of investor interest and population-driven demand is creating significant energy in suburban and lifestyle precincts.

Key Retail Market Highlights:

• Top Performing Sub-regions (Median Price/sqm):
  • Inner Sub-region: $7,500
  • South West Sub-region: $6,650
• Popular Price Bracket: 28.7% of all retail sales fell within the $250,000 – $500,000 range.
• Sales Volume: A total of 212 retail sales were recorded, marking a 34.2% increase compared to the previous year.
• Busiest Sub-regions (Sales Volume):
  • Inner Sub-region: 57 sales
  • South West Sub-region: 39 sales
  • North West & South East Sub-regions: 38 sales each

Industrial Sector: Strong Demand Amidst Limited Supply

The industrial market continued its strong performance, with the annual median sale price per square meter rising by 14.5% year-on-year to $2,675. This also represents a 2.7% increase from the December 2024 quarter.

While sales volumes saw a 7.6% decrease (1,043 sales), Ms. Brown emphasized that this is a reflection of limited supply rather than a drop in demand. “Our members continue to field strong enquiry, particularly from businesses wanting to secure their own premises,” she said. Competition for quality properties is fierce, with some buyers willing to pay above the asking price.

Owner-occupiers are currently leading the charge, but investor interest remains strong for properties with reliable tenants.

Key Industrial Market Highlights:

• Top Performing Sub-region (Median Price/sqm):
  • Inner Sub-region: $3,333
• Popular Price Bracket: 37.6% of industrial sales were in the $1 million – $5 million range.
• Busiest Sub-regions (Sales Volume):
  • South West Sub-region: 272 sales
  • South East Sub-region: 271 sales

Office Market: A Modest Rebound and Growing Interest

The office market also saw positive movement, with the annual median sale price per square meter increasing by 10.2% to $4,500. This reflects a 2.9% rise from the previous quarter.

A modest rebound in sales (up 12.4% with 453 sales) is being driven primarily by local owner-occupiers. The $250,000 to $500,000 price bracket was particularly active, accounting for 36.2% of sales. Buyers are typically seeking smaller spaces (40-80 sqm) for their own use, with a notable interest from financial advisors, consultants, and medical specialists.

Well-presented offices with good natural light and parking are fetching good prices, while those requiring significant refurbishment are proving more challenging to sell.

While investors remain cautious, there are encouraging signs of renewed interest, particularly from Eastern States investors attracted by Perth’s relative affordability. However, tenant demand remains a key consideration. “Tenants prefer properties that are fitted out,” Ms. Brown advised, highlighting the significant cost of fit-outs. Incentives such as rent-free periods are also a common expectation in the current market.

Key Office Market Highlights:

• Top Performing Sub-regions (Median Price/sqm):
  • Inner Sub-region: $4,821
  • South West Sub-region: $4,806
• Busiest Sub-region (Sales Volume):
  • Inner Sub-region: 195 sales

Looking to Invest or Occupy in Perth’s Commercial Market?

The Perth commercial property market presents a range of opportunities across different sectors. Whether you’re drawn to the booming retail scene, the high-demand industrial market, or the rebounding office sector, our team has the expertise to guide you. Contact us today to discuss your commercial property goals and how we can help you navigate this dynamic market.