Where are Australia’s next commercial hotspots?
Commercial properties are expected to recover in 2025, spoiling investors with options and potential for capital growth. But where are the country’s top hotspots?
Following the Reserve Bank of Australia’s rate cut, Knight Frank’s chief economist Ben Burston said commercial properties are expected to turn the tide and start recovering by mid-2025.
“The RBA’s decision signals a turning point for commercial property markets nationally, indicating that the devaluation cycle is ending and that we are turning the corner to a new growth cycle,” Burston said.
He noted that previous market cycles have shown that a shift in monetary policy has historically led to a positive market response, with investors being more likely to enter the market.
Knight Frank’s Australian Horizon Report 2025 projected that the commercial Australian property market would grow and be a “good year” for investors, citing strong evidence of market recovery.
“Investors will increasingly come to the view that the Australian market now represents good value with strong prospects for cyclical recovery and long-term growth, although the pace of recovery will differ for different locations and sectors,” Burston said.
While the report has been expecting Sydney to lead the nation’s commercial investor interest, many other areas across the country are up for grabs.
Here are the top 10 commercial suburbs for 2025:
NSW - Sydney
Marrickville
Only 7 kilometres from Sydney’s CBD, Marrickville in the inner west suburbs has become one of the city’s “hottest” markets.
Knight Frank’s joint head of South Sydney, Anthony Pirrottina, said Marrickville has gained popularity with both residential and commercial buyers due to population growth and new infrastructure.
Currently, the area is getting new facilities, including a new metro train station and the renovation of the local shopping centre.
“Not only is Marrickville close to the city, plenty of amenities, excellent public transport options and key arterial road networks, but it has undergone significant gentrification, making it more appealing,” Pirrottina said.
“A large portion of the properties in the suburb have had their industrial uses transformed to high-density residential development.”
Pirrottina said Marrickville has also been popular with students and will see another 1,000 student accommodation/co-living residences within 24 months.
Revesby
About 20 kilometres from Sydney’s CBD, Revesby is emerging as a new apartment market and has opportunities for commercial and industrial property investors.
“The appeal for commercial and industrial investors is the strong demand from tenants moving out of inner Sydney along the South West/ M4 Corridor,” Pirrottina said.
“Revesby has convenient accessibility via public transport and major roads, which is a drawcard for tenants, in addition to the greater affordability of the area, being at a significant discount to traditional inner Sydney commercial/industrial suburbs.”
Victoria - Melbourne
East Melbourne and the East/Northeastern Fringe
Knight Frank’s head of investment sales, Victoria, Tom Ryan, said areas around the University of Melbourne and St Vincent’s Hospital, such as East Melbourne and Carlton, are prime hotspots for commercial investors.
“They have excellent transport links to the city and provide continued opportunities for medium-rise office developments as a recovery in the overall economy comes to fruition in the next couple of years,” Ryan said.
Similarly, the tech and start-up centres around Richmond and Cremorne also have opportunities for investors.
“For all these areas, good-quality commercial properties with strong ESG credentials are the most sought-after and will therefore offer the greatest opportunities for growth,” Ryan said.
Melbourne’s West
In Melbourne West, the suburbs of Footscray and Sunshine have been attracting investors interested in medium-density residential through build-to-rent or build-to-sell developments.
Ryan said investors’ interest has expanded to the retail offering and flexible office/research facilities.
“There has been big investment in healthcare and improving connectivity, with the continued promise of an airport rail link going through this area which would make a hotel offering tempting,” Ryan said.
Queensland - Brisbane
Albion
Only 5 kilometres from Brisbane CBD and nestled between the city’s most exclusive suburbs, Albion has emerged as one of the top hotspots for investors buying light industrial properties.
Knight Frank’s director, head of investment sales, Queensland, Blake Goddard, said the area has strong prospects and will see future rezoning and gentrification.
“With an already strong presence of amenity and transport connectivity, the distance to CBD, port and airport makes the precinct prime for Brisbane’s next suburb to undergo significant transformation,” Goddard said.
Woolloongabba
Following its rezoning for medium to high-density development in Brisbane’s most recent planning review, Woolloongabba has seen an additional boost in building height allowances due to a state government initiative to foster development across various sectors.
Situated 2 kilometres from Brisbane CBD and next to one of Australia’s top-performing hospitals, the suburb is poised to take advantage of south-east Queensland’s growth in the future.
Goddard said Woolloongabba has seen an uptick in residential development, which has improved surrounding amenity for residents, with more to come.
“The anticipation of one of Brisbane’s newest rail stations with Cross River Rail due to open in 2029 will see a further flurry of activity in years to come,” Goddard said.
“In Woolloongabba investors should consider buying sites with development potential.”
Western Australia - Perth
Perth’s northern suburbs
Suburbs in Perth’s northern growth corridor have become highly sought-after by buyers seeking residential development sites ideal for medium-sized subdivisions.
Knight Frank’s director of investment sales in Perth, Tony Delich, said medium-sized sites are in high demand when they come to market, often attracting multiple offers that exceed the asking price during sale campaigns.
According to Delich, the growth on Perth’s northern corridor expands up to 60 kilometres from the CBD, with the suburbs of Two Rocks, Alkimos and Eglinton.
“These areas already have lifestyle amenities, including shops and parkland and transportation links, but more infrastructure is coming to cater for increased populations, which enhances their investment potential as it will lead to rises in values over time.”
He said that many areas on Perth’s northern corridor have been rezoned or will be rezoned in the years to come, creating further growth.
“With a shortage of residential homes in Perth relative to demand, and a very low vacancy rate, residential development is needed in Perth to provide more housing, and the end product will be met with strong buyer demand,” Delich said.
Perth’s southern suburbs
Senior sales and leasing executive, industrial logistics, Perth, Lachlan Lewis, said industrial investors should consider Perth’s southern suburbs, including Bibra Lake, Henderson, Naval Base, Cockburn and Hope Valley.
He said that industrial properties in the southern corridor are rapidly becoming, and are set to become highly sought-after.
“This is largely due to their proximity to the new West Port to be built in Kwinana and the mega billion defence industry projects being established from Henderson, south of Fremantle all the way down to Stirling naval base off satellite city Rockingham,” Lewis said.
South Australia – Adelaide
Gillman
Located 12 kilometres north-west of Adelaide CBD, Gillman is one of Adelaide’s premier industrial precincts near key access to heavy vehicle transport routes, rail freight, the Port of Adelaide, and the Flinders Ports international container shipping terminal at Outer Harbour.
Knight Frank’s head of capital markets, South Australia, Max Frohlich, said Gillman’s key location is poised for future growth, as land and capital values increase and developable areas become scarce.
“Gillman’s proximity to a large amount of new development occurring in the area, including investment in naval and defence infrastructure near Outer Harbour, will lead to future growth.”
“There is a positive story around defence spending and new developments given Gillman’s proximity to Osborne Naval Shipyard (ONS), which stretches across more than 100 hectares of the Lefevre Peninsula and has increased tenant demand in the area,” Frohlich said.
Thebarton
Thebarton, situated 2 kilometres north-west of the CBD, has been a commercial and industrial hotspot for investors in Adelaide.
Knight Frank partner, institutional sales, South Australia, Ryan Mills, said the area has undergone gentrification and residential growth, with industrial properties continuing to see strong demand from occupiers, thanks to their prime location.
Additionally, many properties present redevelopment potential, thanks to zoning changes that permit mixed-use development in several areas.
“Investors will capitalise on growth in the area resulting from gentrification and rezoning, as well as major projects both underway and planned,” Mills said.
These developments include the $3.8 billion biomedical precinct along North Terrace, the new $3.2 billion Women’s and Children’s Hospital on Port Road, and a 1,000-home residential project on the 8.4-hectare former West End Brewery site.
Additionally, Mills said the proposed developments for the former Coca-Cola site and the former University of Adelaide Thebarton campus will also drive growth.