Australia has cemented its position as a global leader in commercial real estate investment, ranking as the fourth most popular destination for cross-border capital in 2024.
According to Knight Frank’s The Wealth Report 2025, Australia last year attracted US$12.8 billion in transactions, behind the UK (US$26.2 billion), the US (US$24.5 billion), and Japan (US$15.4 billion).
Sydney has emerged as a key investment hub, ranking as the second most active destination for total cross-border CRE investment with US$8.6 billion.
Only London ranked higher, with US$9.6 billion in cross-border investment.
Melbourne also secured a top spot, placing ninth with US$2.6 billion in cross-border investment.
This influx of global capital underscores Australia’s reputation as a stable, growth-oriented market offering high-quality assets.
“We are now seeing the commercial market start to recover and we expect momentum to build throughout the year as confidence returns, however, it will be a multi-speed recovery with some markets taking longer to return to growth,” said Knight Frank Chief Economist Ben Burston.
Foreign Investment Trends: U.S. Leads, Asia Expands
Foreign investment in Australian commercial real estate has been largely driven by capital from the United States, Canada, and the United Kingdom, which were the most active sources of cross-border funding.
Political stability, a resilient economy, and attractive asset yields continue to draw funds, while a favourable exchange rate further enhances returns.
Meanwhile, investment from Asia has also strengthened.
“We expect to see ongoing cross-border investment into Australia, led by groups from Singapore, Japan and the US,” Mr Burston said.
Market Recovery Gains Momentum
The report also highlights Australia’s rapid climb in global CRE rankings, moving from ninth to sixth place in terms of total investment activity, trailing only the US, UK, Japan, China, and Germany.
In US dollar terms, Australia’s CRE investment volumes rose by 57% over 2024.
This marks a sharp turnaround from 2023, driven by less uncertainty over the macro outlook, with an increase in activity in the office, industrial and retail sectors.
Mr Burston said the market was “firmly in recovery mode”, with anticipated interest rate reductions likely to further buoy sentiment throughout 2024.
“We expect yields to start to compress in coming months in the most sought-after markets of Sydney and Brisbane, before extending to other cities,” Mr Burston said.
A Strong Outlook for 2025 and Beyond
With investor confidence rising and demand strengthening, Australia is poised to remain a key destination for global capital, according to Ready Media Group CEO, Nick Materia.
He noted that institutional investors and high-net-worth individuals increasingly view Australia as a strategic market with strong growth potential.
“Australia’s commercial real estate market continues to offer a compelling mix of strong fundamentals and diverse investment opportunities,” Mr Materia said.
“As global economic conditions evolve, investors are looking for markets that provide stability, transparency, and reliable returns. Australia ticks all those boxes, and with sustained interest from offshore buyers, we expect continued growth across key sectors.”
