Investors will need to be more selective to catch the next wave of gains. (Source: Supplied/Getty)
For investors still waiting for a clear signal on where to put capital in 2026, the picture is getting sharper. In a market still adjusting to higher borrowing costs, the strongest opportunities are no longer spread evenly across the country.
Instead, what we are seeing at Rethink Group, investor interest is concentrating in a handful of markets where three things are lining up at once: infrastructure-led demand, population growth, and genuine supply constraints. That is helping explain why industrial and essential retail assets are continuing to outperform, even as other parts of the commercial property market remain more mixed.
Recent market reports from JLL, CBRE and Cushman & Wakefield all point to structurally tight industrial conditions across key Australian markets, while the Queensland and federal governments continue to advance major Brisbane 2032 infrastructure commitments.
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At the top of many investors’ lists is Brisbane and South East Queensland, which continues to attract conviction for both cyclical and long-term reasons. The Brisbane 2032 Olympic and Paralympic build-out is still in the earlier stages, with billions in venue and related infrastructure spending committed and key projects moving through procurement and delivery planning. That matters because commercial rents and land values in well-located growth corridors may still have room to move before the full economic impact is reflected in pricing. Industrial assets are benefiting from population growth and logistics demand, while neighbourhood retail is being supported by expanding suburban catchments.
Melbourne is emerging as the market contrarians are increasingly watching. The city has had a tougher run sentiment-wise, but that is exactly why some investors see value. Industrial property in Melbourne’s western and northern corridors continues to be backed by freight demand, proximity to the Port of Melbourne, and limited well-located land. Vacancy remains relatively low by long-run standards, even if it is higher than some other capitals, and several market updates suggest rental growth and investor demand are stabilising after the repricing cycle of 2024 and 2025. Essential retail is also drawing attention because income remains comparatively dependable and entry pricing is generally more attractive than Sydney for similar asset quality.
Then there is Perth, which continues to outperform expectations and may still be under-appreciated by east coast investors. Industrial vacancy in Perth is now among the lowest in the country, with recent figures showing the market remains severely undersupplied. That is supporting both rents and competition for well-positioned stock, particularly in major industrial precincts tied to freight, warehousing and mining-related activity. Retail conditions are more nuanced depending on the submarket, but broader leasing momentum has improved, and Perth’s tightening fundamentals have made it one of the more compelling stories in the country.
Perth’s market offers very solid fundamentals. (Source: Getty) ·Getty Images
Adelaide is another market quietly moving higher on investors’ radar. Long seen as a lower-profile commercial market, Adelaide is increasingly benefiting from defence-related investment, infrastructure spending and interstate capital looking for value. Industrial precincts tied to the northern corridor are attracting attention, and the city’s yield premium to Sydney and Melbourne has been narrowing as more investors move in. Recent reporting and market commentary suggest that compression still has room to run if demand stays elevated and supply remains disciplined.
Beyond the capitals, regional Queensland remains a serious part of the conversation. Markets such as Mackay, Townsville and Rockhampton are continuing to appeal to investors willing to look past the major metros, particularly where industrial or essential retail assets are backed by national tenants and long leases. The attraction is straightforward: comparatively strong net yields and local economies still being supported by population growth, regional infrastructure and economic diversification. Regional deals are not without risk, but for investors prioritising income, they remain difficult to ignore.
For investors open to looking offshore, New Zealand is starting to re-enter the discussion, particularly Auckland and Christchurch across Rethink Group. The Reserve Bank of New Zealand held the official cash rate at 2.25% on 8 April 2026, giving investors a comparatively lower-rate backdrop than Australia and adding to the view that a recovery phase in commercial property may be building. Yields also remain higher than equivalent prime Australian assets in a number of categories, which is why some investors see trans-Tasman diversification as a way to enter an earlier-stage cycle.
Industrial and essential retail real estate remain very strong options
The bigger pattern running through all of this is that industrial and essential retail remain the standout asset classes for 2026. Investors are still paying up for assets linked to everyday demand: logistics, warehousing, supermarkets, healthcare, and convenience-based spending. In an environment where rates remain elevated and underwriting discipline matters more than it did during the cheap-money years, markets with essential services tenancy, infrastructure-led growth and limited new supply are looking the most resilient.
That does not mean every asset in every hotspot will perform equally well. But it does suggest the smart money in 2026 is becoming more selective, not less. Rather than chasing broad market exposure, investors are increasingly targeting the suburbs, corridors and cities where demand is tangible, vacancy is constrained and income has a defensive edge.
And right now, that means Brisbane and South East Queensland, Melbourne’s industrial belts, Perth’s undersupplied logistics market, Adelaide’s rising value story, selected regional Queensland centres and, for the more adventurous, a recovering New Zealand.
For investors wondering where the next wave of commercial property upside will come from, the answer may not be everywhere. It may be in the places where the fundamentals are already doing the heavy lifting.
Scott O’Neill is a prominent Australian property investor featured in AFR’s Young Rich List four years in a row. He is an entrepreneur and Founder & CEO of Rethink Group a premium property investment group, host of the top commercial property podcast “Rethink Investing’s Inside Commercial Property’’, co-author of “Rethink Property Investing’’ Australia’s number one commercial property investing book.
