Ray White Group Head of Research, Vanessa Rader, has highlighted that this surge represents a significant recovery from the subdued levels seen in 2023, when foreign investment totalled just over $10 billion.
“The remarkable momentum we’re seeing is driven by regulatory efficiency improvements and evolving investment strategies,” Ms Rader said.
“Foreign Investment Review Board processing times have improved significantly, with median processing now taking 29-34 days for commercial proposals.”
Ms Rader explained that this regulatory efficiency has created a more competitive environment for attracting international capital.
“Australia’s framework now balances appropriate oversight while recognising that delayed approvals deter investment in an increasingly competitive global market,” she said.
According to Ms Rader, American investors continue to dominate both the approval pipeline and transaction activity.
“The US remains the largest source of cross-border capital with $6.9 billion in flows year-to-date through mid-2025, which is expected to balloon to over $9 billion by the conclusion of the third quarter,” she said.
“This sustained interest reflects the structural appeal of Australian commercial property to US institutional investors and the continued currency advantage making Australian assets attractive on a USD basis.”
Japanese capital has also returned with renewed vigour, contributing $2.5 billion in cross-border transactions through mid-2025.
“This represents Japan’s re-emergence as a major player in Australian commercial property, with particular interest in office and industrial assets where long-term lease structures align with Japanese institutional investment preferences,” Ms Rader said.
The research also revealed that Korean institutional investors have emerged as significant new players in the market.
“Korean investors are showing particular interest in build-to-rent developments and student accommodation projects in major metropolitan areas,” Ms Rader said.
“This influx arrives at a crucial time when purpose-built rental housing is needed to address supply constraints, demonstrating how foreign investment increasingly targets assets serving structural market needs.”
Ms Rader said that Singapore’s investment flows have shown steady growth, reaching nearly $1.2 billion year-to-date through 2025, while Hong Kong capital is likely to contribute over $1 billion by the end of the third quarter of 2025.
“One of the most striking developments in current foreign investment patterns is the emergence of Thailand as a significant new player,” she said.
“Thai investors are focusing primarily on commercial real estate, suggesting strategic diversification of investment sources now targeting Australian commercial property.”
The breadth of asset classes attracting foreign investment has also expanded significantly, according to Ms Rader.
“International investors view Australia as offering diversified exposure to structural growth trends,” she said.
“From traditional office and retail through to specialised data centres and build-to-rent developments, FIRB approval patterns show this diversification accelerating through 2024, while transaction data confirms capital flows are following approved investment strategies.”
Ms Rader highlighted that alternative residential asset classes have become particularly important in attracting foreign capital.
“Purpose-built student accommodation and build-to-rent developments are drawing significant international interest, addressing critical supply gaps while providing investors with income-generating assets aligned to demographic trends,” she said.
This multi-sector, multi-source approach creates greater stability for Australian commercial property investment volumes and reduced reliance on any single asset class or capital source, according to Ms Rader.
“The data reveals not just a cyclical recovery but potentially a structural shift toward higher baseline levels of foreign investment across an expanded range of commercial property sectors,” she said.
“The combination of improved regulatory efficiency, diverse capital sources, and evolving asset class preferences positions Australia’s commercial property market to capture a larger share of global institutional investment flows.”
