The smaller end of Australia’s commercial property market proved to be more resilient during the first six months of 2023 amid a broader slowdown across the commercial asset classes.  

CBRE’s H1 2023 In and Out report showed that total investment volumes dropped by 50% to $8.8 billion in H1 2023, compared to the same period in 2022. 

However, while deal volumes dropped across the board, there was a significant differential between the drop in sub-$100 million transactions, at 36%, and the 58% fall recorded for deals over $100 million. 

This includes approximately $2.3 billion worth of deals that are yet to settle, with a number subject to a capital raise. 

CBRE’s Head of Capital Markets Research Tom Broderick said tde smaller end of the market has been more resilient, with private buyers seeing the current conditions as an opportunity to buy assets while larger institutional groups were largely on the sidelines. 


CBRE Pacific Head of Capital Markets Flint Davidson said asset size was currently the single biggest factor determining buyer depth on Australian sale campaigns.  

“Over $200 million, you see interest begin to thin whereas scalable transactions were a priority18 months ago. There is still significant liquidity waiting to see pricing revert and debt markets stabilise particularly for larger assets. In overseas markets like Korea, where the interest rate cycle has topped out, buyer depth has returned so the market will be closely watching interest rate movements,” Davidson said.  

CBRE’s analysis of the Australian commercial deals settled in H1 highlights that the office sector recorded the highest volume of transactions at $1.89 billion, followed by retail at $1.83 billion. 

Offshore buyers accounted for just 24% of the H1 sales volume, down from 44% over the same period in 2022.  

This translated to $2.1 billion in total H1 2023 transactions, down 73% y-o-y, with the most significant deal being Kong Kong-based private equity group PAG’s purchase of 44 Market Street for $393 million. 


While overall volumes were significant down, CBRE’s research does highlight a noticeable increase in purchases by Japanese investors, who have gained a competitive advantage due to low interest rates in Japan 

From an outbound perspective, direct investment plunged 87% to $669 million relative to the same period in 2022. 

“Following increased Australian investment into Asia Pacific markets in recent years, domestic groups, particularly large institutional investors, have become cautious in the current environment about buying assets directly as pricing re-calibrates around the world,” Broderick said. 

Europe was the key destination for Australian capital in H1 2023, with the Netherlands the most favoured country, accounting for 36% of total outward direct investment in H1 2023, followed by the UK.