2024 Elders Tasmania Commercial Market Report

The Tasmanian commercial property landscape continues to evolve, offering diverse opportunities across retail, office, industrial, and tourism sectors.

The 2024 Elders Commercial Market Report dives into key developments, transactions, and trends shaping these dynamic markets. Here’s a snapshot of what’s happening across the state:

The retail sector in Tasmania continues to demonstrate resilience, with a record high retail trade figure of $725.4 million in October 2024. The southern region sees strong demand for non-discretionary tenants and bulky goods retailers, with notable developments like Spring Farm Village and Margate Shopping Centre. Major transactions include the $82.5 million sale of Channel Court Shopping Centre in Kingston.

In the north, properties under $1 million are achieving firmer yields due to increased buyer competition, while Launceston’s outer suburban precincts report mixed vacancy rates. Large format retail presents opportunities, although construction costs and limited space pose challenges. Developers are exploring adaptive reuse and creative solutions to meet demand.

Hobart boasts the lowest capital city office market vacancy rate in Australia at just 2.8%, underscoring the strength of Tasmania’s office sector. Owner-occupiers are actively driving demand in the sub-$2 million market, while high-quality “A” grade office spaces are almost entirely leased.

The northern region shows high demand for smaller office spaces, prompting property owners to upgrade older stock to attract tenants. Meanwhile, notable transactions, like the $57.5 million sale of the Lands Building in Hobart, reflect growing investor confidence.

Tasmania’s industrial sector remains strong, with notable activity across the state. In southern Tasmania, ongoing developments in Cambridge and Bridgewater/Brighton drive growth, while traditional hubs like Moonah and Derwent Park maintain robust leasing demand. Key transactions include competitive sales like 98 Mornington Road, which attracted national interest.

Northern Tasmania leads in demand, with developments at Launceston Airport and St Leonards addressing the need for warehousing. Properties under $2 million are particularly sought after by owner-occupiers and investors. The North-West industrial market is also thriving, with steady warehouse transactions and strong local participation, particularly from owner-occupiers.

Tasmania’s tourism sector has rebounded strongly post-pandemic, reaching 98.9% of pre-pandemic visitation levels and seeing a 40% increase in visitor spending compared to 2019. While hotel buyer demand has softened, motels are drawing significant interest, exemplified by the swift sale of the Fox and Hounds Inn.

The sector’s outlook remains optimistic with the introduction of new Spirit of Tasmania ferries and potential direct flights from South-East Asia promising to boost international tourism.

With robust fundamentals across all sectors and optimism for potential interest rate cuts, Tasmania’s commercial property market is well-positioned for 2025.

For more insights into these trends and opportunities, read the full report here. Discover how Tasmania’s commercial property market can unlock your next investment or development opportunity!