Sydney has entered the new financial year with improving confidence across commercial and industrial property, supported by stronger investor sentiment, resilient occupier demand and one of the tightest industrial markets in Australia. While higher interest rates continue to influence investment decisions, July has seen increasing activity from institutional investors, private capital and owner-occupiers targeting quality assets with long-term growth potential.

Industrial property remains Sydney’s standout performer, with vacancy rates across many western and south-western precincts remaining exceptionally low. Businesses continue competing for modern logistics facilities, while developers face ongoing shortages of serviced industrial land.

Major infrastructure projects, including the Western Sydney International Airport and Aerotropolis, continue reshaping the city’s commercial landscape and creating significant opportunities across logistics, manufacturing and advanced industries.

Sydney market snapshot

• Industrial vacancy remains among Australia’s lowest.
• Investor confidence continues improving.
• Rental growth remains strong across logistics facilities.
• Development-ready industrial land remains scarce.
• Western Sydney continues attracting major investment.
• Office leasing activity continues stabilising.
• Institutional investors remain active.
• Data centres continue expanding across Sydney.
• Infrastructure projects continue driving long-term confidence.

Major commercial property activity

Sydney continues recording significant commercial transactions as investors reposition portfolios for the new financial year.

Activity remains strongest across:

• Prime industrial facilities
• Logistics distribution centres
• Business parks
• Mixed-use development sites
• Healthcare assets
• Neighbourhood retail centres
• Premium commercial office buildings

Institutional capital continues targeting assets with secure long-term leases, while private investors remain active in smaller industrial and commercial investments.

Developers also continue acquiring strategic sites throughout Western Sydney, anticipating long-term growth generated by infrastructure investment and population expansion.

Industrial market continues leading Australia

Sydney’s industrial sector remains one of the country’s strongest performing markets.

Demand continues coming from:

• National logistics companies
• Third-party logistics operators
• E-commerce businesses
• Manufacturing companies
• Construction suppliers
• Food distributors
• Transport operators
• Advanced manufacturing businesses

Businesses continue prioritising facilities offering:

• High internal clearance
• Multiple loading docks
• B-double access
• Large hardstand areas
• Premium office accommodation
• ESG-compliant design
• Solar capability

Supply remains extremely constrained, particularly for modern warehouses larger than 5,000m².

Western Sydney remains Australia’s largest growth corridor

Western Sydney continues dominating commercial property investment.

Major growth areas include:

Eastern Creek

One of Australia’s premier logistics markets, Eastern Creek continues attracting national distribution centres due to its strategic motorway connections and proximity to the future airport.

Erskine Park

Demand remains exceptionally strong for large-scale warehousing and transport facilities, with limited new supply supporting rental growth.

Marsden Park

Commercial and industrial development continues expanding alongside rapid residential growth, creating opportunities across logistics, retail and service industries.

Kemps Creek

The Aerotropolis continues transforming Kemps Creek into one of Australia’s most significant future employment hubs, attracting industrial developers, technology companies and major logistics operators.

Western Sydney Airport continues reshaping the market

The Western Sydney International Airport remains Australia’s most significant commercial property catalyst.

The surrounding Aerotropolis continues attracting investment across:

• Advanced manufacturing
• Freight and logistics
• Defence industries
• Aerospace
• Technology businesses
• Research facilities
• Commercial offices
• Industrial estates

Developers continue positioning themselves early within surrounding precincts, recognising the long-term employment and economic benefits expected over coming decades.

Data centre investment accelerates

Sydney continues leading Australia in data centre development.

Demand for digital infrastructure continues driving investment across Western Sydney, where access to power, fibre connectivity and large industrial sites make the region increasingly attractive.

The continued growth of artificial intelligence, cloud computing and enterprise technology is expected to support further expansion throughout the second half of 2026.

Commercial office market continues improving

Sydney’s office market continues stabilising as businesses increasingly favour premium accommodation.

Demand has remained strongest for:

• A-grade office buildings
• Sustainable workplaces
• Flexible office space
• Premium end-of-trip facilities
• Wellness-focused workplaces

Many businesses continue consolidating into higher quality buildings rather than increasing their overall office footprint.

Premium CBD assets continue attracting institutional interest as confidence gradually improves.

Infrastructure continues supporting long-term growth

Sydney’s infrastructure pipeline remains one of the largest in Australia.

Key projects include:

• Western Sydney International Airport
• Sydney Metro expansion
• M12 Motorway
• WestConnex
• Aerotropolis development
• Freight rail improvements
• Port Botany upgrades
• Major health precinct expansions
• Western Sydney road upgrades

These projects continue improving freight efficiency while opening new commercial development opportunities across Greater Sydney.

Rental growth remains strong

Industrial rental growth continues across Sydney’s key logistics markets.

The combination of:

• Low vacancy
• Limited land supply
• Population growth
• E-commerce expansion
• High construction costs

continues placing upward pressure on rents throughout many industrial precincts.

Well-located logistics facilities often attract multiple competing tenants before practical completion.

Investor confidence continues strengthening

Sydney remains Australia’s largest commercial property investment market.

Investors continue targeting:

• Prime logistics facilities
• Industrial estates
• Business parks
• Healthcare assets
• Neighbourhood retail
• Premium office buildings

Long-term confidence remains supported by strong population growth, infrastructure investment and Sydney’s position as Australia’s largest economic centre.

What developers should watch

Several themes are expected to shape Sydney’s commercial property market during the second half of 2026.

• Continued growth around the Western Sydney Airport.
• Ongoing industrial land shortages.
• Expansion of data centres.
• Strong logistics demand.
• Increasing institutional investment.
• Premium office recovery.
• Advanced manufacturing growth.
• Rental growth across industrial assets.
• Continued infrastructure-led development throughout Western Sydney.

Developers who secure strategic industrial and commercial sites within Western Sydney are likely to benefit from one of Australia’s largest long-term infrastructure and employment transformations.

Position your project ahead of the market

As Sydney’s commercial property market becomes increasingly competitive, projects need to stand out long before construction begins.

At Commercial Property Marketing, we work with developers, landowners and agencies across Australia to create marketing strategies and visual content that help projects achieve measurable commercial outcomes.

Our work is designed to:

• Increase land values.
• Accelerate pre-sales and pre-leasing.
• Generate stronger investor interest.
• Reduce vacancy periods.
• Support planning approvals and stakeholder engagement.
• Improve buyer confidence.
• Differentiate projects in competitive markets.
• Maximise the long-term value of commercial property assets.