Sydney June 2025 Commercial & Industrial Market Update

Sydney’s commercial and industrial property sectors are surging forward in June 2025. Major infrastructure projects, airport-driven growth in the west, and renewed CBD confidence are creating a layered, fast-moving market. With low industrial vacancy, rising suburban redevelopment, and institutional leasing deals gaining momentum, Sydney remains one of Australia’s most active and high-performing locations for commercial real estate investors and developers.

Western Sydney Airport Sparks Rapid Commercial Expansion

The Western Sydney International Airport continues to reshape the region’s economy. Lending activity, business investment, and land uptake are outpacing other parts of the city as logistics, services, and construction operators stake their claims near this emerging 24-hour freight and travel hub.

• Business lending has increased by 15% across the Western Sydney region, with suburbs like Austral seeing 166% growth

• Major new projects include a $55M Coles-anchored retail precinct, accelerating local population and workforce amenity

• Industrial developments are rising near the airport, such as Renier Group’s 600,000-tonne waste recycling facility in Luddenham

CBD Office Leasing Rebounds With Major Commitments

After years of post-COVID uncertainty, Sydney’s office market is stabilising. In a major vote of confidence, top-tier tenants are renewing long-term leases in premium towers — indicating that location, amenity, and brand positioning still matter in the battle for top-tier space.

• EY has renewed its lease for 25,850sqm at 200 George Street, one of Sydney’s landmark commercial addresses

• The lease sits at ~$1,550/sqm net rent, reflecting strength in prime CBD locations with strong architectural and wellness features

• Market analysts expect national effective rents to return to pre-COVID levels by 2026 as incentives decline and supply tightens

Industrial Vacancy Remains Among the Lowest in the World

Sydney’s industrial property market continues to lead the country. Occupier demand has remained intense while construction has slowed — driving up rents, keeping vacancies extremely low, and pushing capital toward build-to-suit strategies and repositioning existing sites.

• Vacancy rates remain below 1.5%, particularly in zones like Eastern Creek, South Sydney, and Wetherill Park

• Income returns are at their highest since 2016, delivering total returns well ahead of other commercial asset classes

• Occupier supply chains are shifting to multi-site portfolios, but Sydney remains the anchor due to location and infrastructure

Infrastructure Uncertainty Around the M6 Corridor

Not all infrastructure is running smoothly. The $3.1B M6 motorway project — a critical southern freight and commuter link — faces uncertainty due to unexpected sinkholes and geological complications. While not directly impacting the market yet, delays could affect freight route planning in the south.

• The M6 is currently 90% complete but facing delays and contract disputes, potentially pushing opening beyond 2028

• Geological faults near Rockdale have raised concerns about future construction risk and cost blowouts

• Government insists on delivery, but future freight infrastructure plans may be re-evaluated depending on outcome

Suburban Precincts Continue to Densify and Diversify

Sydney’s suburban commercial landscape is evolving. In areas like Brookvale, long-held industrial land is now being rezoned and masterplanned for creative, residential, and service-based commercial use — a trend playing out across the city as councils aim to increase activation and balance density.

• Brookvale’s new structure plan aims to deliver a 15-year vision for mixed-use redevelopment across key industrial corridors

• A new $22M development on Pittwater Road will deliver 68 residential units and four-storey height uplift

• Council plans support a shift toward creative business hubs, health services, and strata retail within repurposed buildings

Sydney’s Commercial Trajectory Remains Diverse and Durable

Sydney is delivering layered growth across infrastructure, industrial, CBD leasing, and suburban redevelopment. While cost pressures remain and construction slowdowns persist, investor sentiment is turning bullish in key submarkets. Landowners, developers, and agents with clear positioning are well placed to outperform.

• Institutional buyers are returning to prime office and logistics assets, particularly those with ESG credentials

• Suburban strata developments and neighbourhood-scale commercial centres are gaining leasing traction

• Infrastructure will remain a wildcard, but Sydney’s population, density, and capital access continue to drive momentum

How Commercial Property Marketing Can Help

At Commercial Property Marketing, we help bring clarity to fast-moving markets like Sydney. Whether you’re launching a new industrial estate, securing pre-commitments for an office tower, or repositioning a suburban site, our 3D renders, aerial marketing, IMs, and digital tools are built to maximise visibility and value.