Australian Outlook 2025 Reports

EXPLORING KEY SECTORS

Office 

The Australian office market is in recovery, with investment and occupier demand stabilising across key CBDs. Sydney and Brisbane are leading the rebound, while Melbourne, Perth and Adelaide are experiencing a steadier recovery, supported by long-term fundamentals. Businesses are focusing on well-connected core areas, reinforcing demand for good quality assets in key precincts.
With the market bottoming out in 2024, investment sentiment is improving, and transaction volumes are rising as capital re-engages. Meanwhile, tightening supply in core CBD locations is expected to support rental growth in well-positioned assets over the coming years.

Logistics & Industrial Capital Markets

Following two years of pricing dislocation and muted transaction volumes as capital sat on the sideline, 2025 is shaping up to be a dynamic year for Australia’s L&I Capital Markets. 
Further rate cuts in 2025 will provide the backdrop to improved liquidity, with a material jump in investment volumes forecast, supported by new capital sources from offshore markets. The growing weight of capital seeking to be deployed into Australian logistics is expected to see the emergence of yield compression in late 2025 – a trend that is already occurring in select major markets globally.

Alternatives

Alternative assets have seen impressive growth over the past two years, and 2025 is set to continue this trend. Transactions in sectors such as data centres, build-to-rent, and student accommodation have driven significant diversification among investors, reaching over $12 billion in 2024. Projections for 2025 indicate sustained momentum, with $11.5 billion expected to flow into alternative investments.
Further opportunities are emerging in renewable energy and cybersecurity infrastructure, expanding the scope of alternative asset investments. These segments offer both defensive qualities and structural growth potential, making them attractive for forward-thinking investors.

ECONOMIC OUTLOOK FOR 2025

The Australian economy has reached an inflection point as the RBA has pivoted and started the rate cutting cycle. Against this backdrop growth is expected to accelerate throughout 2025 and 2026 on the back of improved consumer and business confidence. 
The current strength in the labour market obscures how long the cycle will last, and how much the RBA will cut interest rates. Seeing productivity growth return will be key to removing the economy’s supply-side constraints and sustaining the coming economic expansion through the medium term.