Where private investors find Australia's best property value

Australia has quietly become one of the world's most compelling destinations for private capital, ranking fourth globally for high-net-worth investment activity. Population growth drives this momentum. Melbourne is projected to be Australia’s largest city by the early 2030’s, whilst Sydney is expected to remain a key location for top white collar talent. Brisbane's preparation for the 2032 Olympic Games is transforming that market with major infrastructure investments reshaping urban hubs. 

But the most important shift is simpler. Institutional investors have stepped back in select sectors, and whilst they are slowly coming back to market, private investors who move decisively can gain a competitive advantage. Understanding where the best opportunities are could define your portfolio for the next decade.

Retail has undergone profound adjustment and emerged stronger, supported by high occupancy and strong population growth driving demand for local services.

"Properties anchored by essential services – grocery stores, pharmacies, medical centres – consistently outperform during market corrections," explains Sebastian Fahey, senior executive of retail investments for JLL Australia. "These tenants sign longer leases and rarely vacate, which protects your income stream even when broader retail faces headwinds.”

Supply constraints strengthen the sector further. "We're massively behind – by about 150 to 250 shopping centres – to keep up with demand," Fahey explains. "That's largely due to construction costs and planning regulations.” When supply can't keep up with population growth, well-located existing assets become increasingly valuable.

The opportunity lies in neighbourhood centres serving daily needs – workhorses generating steady income from tenants with strong credit profiles and long-term commitments.

Private investors are seeing opportunity in quality office assets in markets where institutional demand has temporarily declined. The best opportunities sit in CBD-fringe locations across Sydney and Melbourne, vibrant areas just outside city centres where quality buildings trade at meaningful discounts.

"When institutional investors step back from the market for a period, it suddenly creates opportunities for private investors to go into areas they may not have been able to access before," notes Luke Billiau, head of capital markets, Australia & New Zealand. While headlines focus on "work from home" concerns, actual leasing data shows tenants are returning to well-located, quality office space.

Private investors should focus on acquiring good-quality buildings at attractive pricing, then executing targeted improvements – lease-up, tenant repositioning or building upgrades – to increase value over three to five years. Offices require more active management than retail or industrial, but the value creation potential can be substantial for those who understand tenant requirements and market dynamics.

Supply chain disruptions haven't weakened industrial properties; they've strengthened them. Businesses are rethinking logistics networks, relocating to warehouse space that is closer to their customers with modern specifications supporting faster delivery.

Paul Chapko, head of capital markets research for JLL Australia, emphasises the sector's recalibration over the past few years. " We are emerging from a period of very strong income growth to what we could consider more normalised growth" he says. "New supply has placed upward pressure on vacancy rates, providing tenants more options and we have observed these tenants relocating into best in class stock. Investors resonate with this and have deployed strategies to identify well located, higher end assets which provide stable income generation."

For private investors, this creates both opportunity and competition. Industrial fundamentals remain robust, which means quality assets attract intense bidding. Large-scale logistics facilities draw institutional investors with their significant capital requirements, but the opportunity for private investors lies in smaller-format properties serving local distribution needs. 

These assets benefit from the same e-commerce and supply chain trends while competing in a different buyer pool. Properties closer to city centres offer particular advantages as land scarcity limits new construction, protecting against oversupply risk, while proximity to customers makes these facilities valuable for last-mile delivery.

The hotels and hospitality sector has emerged from pandemic disruption with robust fundamentals. Australian hotel investment volumes totalled $1.69 billion in 2024, with 51 deals completed. This reflects sustained mid-market activity where private investors remained active even as larger institutional transactions slowed.

Hotel occupancy rates have recovered to pre-pandemic levels across major markets, while average daily rates have grown significantly. Brisbane, Sydney and Melbourne all benefit from packed event calendars driving consistent demand beyond leisure travel.

Brisbane presents particularly compelling medium-term prospects. The city has entered its "golden decade" leading up to the 2032 Olympic Games, with major infrastructure investments already underway. Melbourne continues to make the most of its position as Australia's events capital, with sporting events, concerts and conferences maintaining year-round demand.

For private investors, hotels offer structural advantages: accessible price points compared to retail or office assets, professional management companies handling day-to-day operations and performance directly benefitting from Australia's growing tourism sector and major event calendar.

Australia's commercial real estate market presents a distinctive window that won't stay open for long. Population growth continues driving demand across all property sectors. Infrastructure investment across Australia is reshaping the urban geography. 

"The Australian property market provides a wide array of investment opportunities for private investors," Billiau concludes. "Whilst we are currently going through a period of market uncertainty, well located assets with solid covenants provide an opportunity for stable long-term returns."

The private investors making the most of this opportunity aren’t chasing headlines or timing short-term moves. They're building relationships with local advisers who understand market nuances, studying demographic patterns and infrastructure investment timelines, and focusing on fundamentals that deliver consistent long-term asset performance.

If you’re thinking about what your portfolio should look like over the next decade, the right advisory partnership can help turn vision into a long-term strategy.

Connect with one of our expert advisors to discuss your real estate portfolio.