Australia real estate deal value drops 35% to AUD5b in Q3

This is across the office, industrial, and retail sectors.

In a report, Savills said preliminary data indicates that Australian investment activity continued to moderate in Q3. The shift to lower interest rates has boosted investor sentiment but also given many potential sellers an incentive to hold on to assets in anticipation of a rebound in capital values.

“Completed deal volume across the office, industrial, and retail sectors totalled approximately AU$5.09 billion (for deals AU$10 million+) in Q3, a 29% decline from Q2 and 35% lower than Q3/2024. However, a further c.AU$4.3 billion of deals are pending, which could lift overall investment volumes once completed,” the report said.

Here’s more from Savills:

Amid this subdued environment, retail continues to hold up relatively well, with investment volume for completed deals declining by just 9% in Q3 to AU$1.91 billion to be 12% lower than a year ago. Large shopping centre transactions continue to underpin activity, supported by consistently high income returns and modest capital growth. An additional AU$1.4 billion in retail deals are pending, underscoring its relative strength and its appeal to investors seeking income-led performance.

Industrial investment volume fell by 36% in Q3 to AU$1.93 billion to be 30% lower over the year. Nonetheless, a further AU$1.1 billion of deals are pending, suggesting liquidity is gradually improving. Importantly, buyer diversity is expanding, with new capital partnerships emerging between domestic players and offshore groups, particularly from North America.

Activity in the office sector declined by 40% in Q3 to AU$1.25 billion, 56% lower than Q3/2024. However, AU$1.8 billion of pending transactions, including several large deals in Sydney, Melbourne, and Brisbane, pointing to a potential late-year rebound and stronger momentum into 2026.

Overall, while investment activity remains subdued, investor sentiment is improving. A rise in private sector activity, the likelihood for further monetary policy easing, and the prospect of renewed capital growth across most sectors is beginning to shift the outlook into a more positive direction.