Regional Commercial Property Investment Shifts to Growth Markets
Absolutely — here’s a strong **news-style story aimed specifically at real estate agents and property professionals**, rather than simply rewriting the Knight Frank media release. # Regional commercial property steps into the investment spotlight **Regional commercial property is emerging as one of Australia’s stronger growth stories, with rising investment volumes, population shifts and increasingly diverse local economies reshaping opportunities for agents and investors outside the capital cities.** Regional commercial property transactions reached **$6.2 billion in 2025**, the third-highest level on record, according to Knight Frank’s *Australian Regional View 2026*. Regional deals represented about **11 per cent of all Australian commercial property transactions**, with retail accounting for more than 40 per cent of activity. The figures point to a broader change in the way regional markets are being viewed. Once regarded primarily as higher-yield alternatives to metropolitan assets, regional centres are increasingly being assessed as growth markets in their own right, supported by population decentralisation, infrastructure investment and economic diversification. Knight Frank Senior Economist Alistair Read said investor perceptions had shifted substantially over the past five years. “Investors are increasingly recognising that many regional centres now possess the economic scale, population growth and industry diversity required to support long-term commercial property performance,” Mr Read said. For agents operating outside the capitals, population growth is emerging as one of the most significant demand drivers. About **8.9 million Australians, or 32 per cent of the population, lived outside the capital cities in 2024-25**, with that figure forecast to reach 9.6 million over the next decade. Much of that growth is expected to favour well-connected coastal markets. The Gold Coast population is forecast to grow **19 per cent** over the next decade, followed by Wollongong at **16 per cent**, Townsville at **14 per cent** and Newcastle at **11 per cent**. Geelong is projected to grow by an even stronger **22 per cent**. The implications extend beyond residential demand. More people living and working in regional centres is expected to increase economic activity and demand for retail, office and industrial space, particularly in growing coastal catchments. ### Not all regional markets are the same For agents, however, the regional story is becoming increasingly market-specific. Newcastle is shifting beyond its traditional reliance on coal and heavy industry, with professional services, healthcare, education, tourism and advanced manufacturing expanding. Its industrial market is also benefiting from the Port of Newcastle, renewable energy investment and defence activity around RAAF Base Williamtown. Wollongong is experiencing a similar transition towards service industries. The report points to professional services and healthcare growth, the expanding University of Wollongong and the $2 billion BlueScope Land Transformation project at Port Kembla as important drivers of future commercial demand. On the Gold Coast, rapid population growth and economic diversification are translating into increasingly tight commercial conditions. A-grade office vacancy fell from **18.6 per cent in January 2021 to just 3.2 per cent in January 2026**, while limited new supply is expected to support rental growth. Knight Frank also identified **Geelong, the Sunshine Coast and Fraser Coast** as future growth regions, with the three markets accounting for about 18 per cent of net internal migration to regional Australia in the year to the first quarter of 2026. ### More than a population story The opportunity is also broadening across asset classes. Retail remains the most heavily traded regional commercial asset, but demand for seniors housing and care is increasing as the population ages. Tourism is another potential tailwind, with total Australian tourism expenditure forecast to rise **22 per cent to $233 billion by 2030**, supporting retail, hotel and broader commercial activity in regional destinations. Agriculture, defence, logistics, renewable energy, healthcare and education are also creating different commercial property opportunities from market to market. Wagga Wagga, for example, has more than **$15 billion in infrastructure projects** earmarked for the city and surrounding Riverina-Murray region over the next five to 10 years, while its economy has expanded beyond agriculture into education, healthcare, defence and advanced manufacturing. Townsville is benefiting from a growing defence presence, with **$700 million in defence-related infrastructure and facilities investment** expected to support construction, logistics and industrial demand. For agents, the emerging picture is that “regional” can no longer be treated as a single property market. Population growth may be providing the broad tailwind, but infrastructure, employment and industry diversification are increasingly determining where commercial property demand is strongest. And as more capital looks beyond the major cities, local market knowledge could become an increasingly valuable advantage for agents able to identify which regional centres have the fundamentals to turn population growth into sustained property demand. Image: Supplied/Lois
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Regional commercial property transactions reached $6.2 billion in 2025, the third-highest level on record, according to Knight Frank’s Australian Regional View 2026.

Regional deals represented about 11 per cent of all Australian commercial property transactions, with retail accounting for more than 40 per cent of activity.

The figures point to a broader change in the way regional markets are being viewed.

According to Knight Frank, once regarded primarily as higher-yield alternatives to metropolitan assets, regional centres are increasingly being assessed as growth markets in their own right, supported by population decentralisation, infrastructure investment and economic diversification.

Knight Frank Senior Economist Alistair Read said investor perceptions had shifted substantially over the past five years.

“Investors are increasingly recognising that many regional centres now possess the economic scale, population growth and industry diversity required to support long-term commercial property performance,” he said.

For agents operating outside the capitals, population growth is emerging as one of the most significant demand drivers.

About 8.9 million Australians, or 32 per cent of the population, lived outside the capital cities in 2024-25, with that figure forecast to reach 9.6 million over the next decade; and much of that growth is expected to favour well-connected coastal markets.

The Gold Coast population is forecast to grow 19 per cent over the next decade, followed by Wollongong at 16 per cent, Townsville at 14 per cent and Newcastle at 11 per cent.

Geelong is projected to grow by an even stronger 22 per cent.

The implications extend beyond residential demand. More people living and working in regional centres is expected to increase economic activity and demand for retail, office and industrial space, particularly in growing coastal catchments.

Not all regional markets are the same

For agents, however, the regional story is becoming increasingly market-specific. Newcastle is shifting beyond its traditional reliance on coal and heavy industry, with professional services, healthcare, education, tourism and advanced manufacturing expanding.

Its industrial market is also benefiting from the Port of Newcastle, renewable energy investment and defence activity around RAAF Base Williamtown.

Wollongong is experiencing a similar transition towards service industries. The report points to professional services and healthcare growth, the expanding University of Wollongong and the $2 billion BlueScope Land Transformation project at Port Kembla as important drivers of future commercial demand.

On the Gold Coast, rapid population growth and economic diversification are translating into increasingly tight commercial conditions.

A-grade office vacancy fell from 18.6 per cent in January 2021 to just 3.2 per cent in January 2026, while limited new supply is expected to support rental growth.

Knight Frank also identified Geelong, the Sunshine Coast and Fraser Coast as future growth regions, with the three markets accounting for about 18 per cent of net internal migration to regional Australia in the year to the first quarter of 2026.

More than a population story

The opportunity is also broadening across asset classes.

Retail remains the most heavily traded regional commercial asset, but demand for seniors housing and care is increasing as the population ages.

Tourism is another potential tailwind, with total Australian tourism expenditure forecast to rise 22 per cent to $233 billion by 2030, supporting retail, hotel and broader commercial activity in regional destinations.

Agriculture, defence, logistics, renewable energy, healthcare and education are also creating different commercial property opportunities from market to market.

Wagga Wagga, for example, has more than $15 billion in infrastructure projects earmarked for the city and surrounding Riverina-Murray region over the next five to 10 years, while its economy has expanded beyond agriculture into education, healthcare, defence and advanced manufacturing.

Townsville is benefiting from a growing defence presence, with $700 million in defence-related infrastructure and facilities investment expected to support construction, logistics and industrial demand.

For agents, the emerging picture is that “regional” can no longer be treated as a single property market.

Population growth may be providing the broad tailwind, but infrastructure, employment and industry diversification are increasingly determining where commercial property demand is strongest.

The report suggests that as more capital looks beyond the major cities, local market knowledge could become an increasingly valuable advantage for agents able to identify which regional centres have the fundamentals to turn population growth into sustained property demand.