Transaction activity has held firm through the first half of 2026, despite persistent macroeconomic headwinds and subdued sentiment.
However, market activity is increasingly being driven by asset quality and pricing discipline, rather than broad-based confidence.
Cushman & Wakefield’s Chief Executive for Australia, New Zealand and North Asia, Noral Wild, said the first half of the year had demonstrated the underlying strength of the market.
“The commercial real estate market is showing its resilience, with investors remaining disciplined amid broader market volatility,” Ms Wild said.
“Capital continues to target quality assets, and occupier demand remains healthy across many sectors. However, investors and occupiers are taking time to make decisions as they weigh economic and geopolitical headwinds.”
Selective capital leads the market
Capital has not retreated from the market, but deployment has become more selective and targeted, according to National Head of Commercial Real Estate David Hall.
Mr Hall said investors, occupiers and owner-operators were taking a more disciplined approach to pricing and risk.
“Transaction activity has continued across all major markets, although participants remain disciplined in their approach to pricing and risk,” he said.
The focus was firmly on asset quality, income durability and long-term relevance.
“There is growing evidence that capital is ready to transact when the right opportunities arise,” he said.
Delivery confidence lifts
Construction costs and supply chain constraints continue to weigh on activity, though confidence in project delivery is gradually improving.
Head of Project & Development Services, Australia and New Zealand, Todd Hanrahan said clients were prioritising investment in workplace, industrial and infrastructure assets aligned with long-term operational needs.
“We’re seeing a more disciplined and strategic approach to capital deployment,” Mr Hanrahan said.
“Organisations are prioritising projects that deliver tangible operational, cultural and sustainability benefits, rather than simply expanding for expansion’s sake.”
Sustainability drives value
Sustainability and workplace performance are increasingly shaping asset and investment decisions.
Head of Sustainability & ESG for Asia Pacific Matt Clifford said the sector had moved from ambition to implementation.
“Asset owners, investors and occupiers are increasingly focused on initiatives that improve building performance, reduce operating costs and support long-term asset value,” Mr Clifford said.
“Organisations are prioritising practical decarbonisation strategies, energy efficiency measures and resilience planning that deliver measurable environmental and commercial outcomes.”
As market expectations continue to evolve, sustainability is expected to become a key differentiator.
“The assets that will outperform over the long term are those that can successfully combine strong environmental performance with operational efficiency and occupier appeal,” he said.
Measured recovery on the horizon
Ms Wild said conditions remained uneven, and the market continued to adjust to pricing realities.
“Capital remains available, but it hasn’t always been active, with investors remaining cautious about deploying at scale,” Ms Wild said.
“As a result, the market has remained highly selective, with conviction concentrated around opportunities where pricing and long-term fundamentals are strongest.”
Strong fundamentals would support a steady improvement over the coming months, with opportunities emerging where future supply is increasingly constrained.
“Higher funding and construction costs have slowed the next wave of development across a number of sectors, creating an opportunity for occupiers to secure quality space before conditions tighten,” she said.
“For patient capital, that same supply dynamic can support long-term value as new stock remains limited.”
