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Australian commercial property transactions reached $19 billion in the first half of 2026, a 16 per cent increase on the same period last year, with domestic institutional investors stepping in as offshore purchasing retreated amid global volatility.
Retail assets led deal flow at $6.1 billion, followed by industrial and logistics at $5.5 billion and office at $4.1 billion, according to CBRE's latest capital markets data.
The figures point to a market recovering momentum despite persistent macroeconomic headwinds including elevated interest rates, inflationary pressures and geopolitical uncertainty stemming from conflict in the Middle East.
Among the landmark transactions underpinning the half were Sydney-based Goodman Group's (ASX: GMG) $2.65 billion industrial deal with Washington H. Soul Pattinson (ASX: SOL) and Lendlease's (ASX: LLC) $1.2 billion retail sale to GPT Group (ASX: GPT).
Offshore buyers accounted for $4 billion of the total, representing just 21 per cent of transaction volume and marking an 8 per cent decline year-on-year.
The pullback reflects a broader pattern of international capital sitting on the sidelines as global uncertainty weighs on cross-border allocation decisions.
“Following strong momentum and elevated transaction activity in the new year, we entered a period of disruption driven by interest rates, inflation, and conflict in the Middle East before a level of stabilisation more recently,” says Flint Davidson, CBRE's Pacific head of capital markets.
“Against that backdrop, the fact that volumes still increased by 16 per cent year-on-year points to a market that is becoming more resilient to increasingly common shocks.
"Looking ahead, we expect a substantial pipeline of property assets to be brought to market in H2.”
Tom Broderick, CBRE's head of capital markets research, says domestic institutions are increasingly filling the void left by cautious foreign buyers.
“The clear trend for H1 is that domestic institutions and fund managers are getting more active while investment from offshore groups has slowed," he says.
"Volatility at the global level often causes investors to pause and concentrate on their home markets, which is what we are seeing so far this year.”
The $6.1 billion in retail assets changing hands is up 4 per cent year on year and this includes Lendlease’s $1.2 billion sale to GPT of half stakes in Sunshine Plaza at Maroochydore in Queensland and Macarthur Square at Campbelltown in Sydney’s south-west.
Industrial and logistics sales of $5.5 billion were buoyed by Goodman Group’s $2.65 billion deal with Washington H. Soul Pattinson and Company to take control of a series of large warehouse developments. Volumes for Industrial were up by 5 per cent over the year.
With offices coming back into focus, office sales were up 15 per cent over the year to $4.1 billion, driven mostly by major deals in Sydney such as 100 Mount Street in North Sydney, which sold for $558 million to Investa, BGO and Cliffbrook Capital.
Meanwhile activity in the living and hotel sectors rose significantly, although this has come off last year’s low base, with $2 billion in living deals (up 93 per cent) and $1.2 billion in in hotel trades (up 85 per cent).
The half-year result has already outstripped the trajectory implied by CBRE's own Pacific Real Estate Market Outlook published in January, which forecast investment volumes would grow 5 per cent across the full year.
CBRE's January outlook also flagged structural supply constraints as a defining feature of the current cycle, with new development supply across commercial asset classes running at just 20 to 50 per cent of historical levels.
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