Melbourne Commercial & Industrial Property Market Review - August 2025
“The smart buyers should be in acquisition mode right now to stay ahead of the next market lift.”
Market Review
The state of the market in Victoria appears poised for a strong second half to 2025. We have experienced a steady run of activity, but it has taken patience and nurturing to get transactions finalised. Time on market has been longer in 2025 (with some exceptions) as buyers and tenants take longer to reach decisions.
While the interest rate cycle is starting to work in our favour, it has only seen marginal increases of activity thus far. We feel it may take another 100 basis points to really give the market the nudge it needs, and this should occur in the months to follow. The smart buyers should be in acquisition mode right now to stay ahead of the next market lift.
Owner occupiers remain vital to our market and continue to drive values for our vendors, particularly in our established industrial markets. Investors provide a different landscape and appear to be two-tiered. Those simply seeking high returns have misread the market and are struggling to secure properties; whilst those prepared to take the long-term view are considering the properties underlying fundamentals and future security will meet the vendors at a mutually beneficial level and transact. It’s worth noting we are seeing an uptick from interstate investors in the current climate.
Leasing rates have remained stable for the year to date, with a slight increase in incentives. Tenants can negotiate more flexible outcomes as supply levels have lifted and landlords seek to fill vacancies. Finally, a bit more breathing space for businesses on the tenant side of the ledger.
Please reach out if we can assist you further in our market.
Matt O’Dea, Facey Property