Business growth signals positive outlook for commercial property. 

Ray White Group Head of Research, Vanessa Rader, said the latest figures show a continuing uptrend in new business formations, with significant implications for commercial real estate. "Despite nearly 363,000 businesses ceasing operations over the last financial year, this was more than counterbalanced by 436,018 new entrants, resulting in a positive net change of more than 73,000," Ms Rader said.

She said that this surge has expanded the total number of businesses in Australia to 2,656,344, marking a 2.8 per cent increase over the past year—and an impressive 17.2 per cent growth over the last five years. "This expanding business landscape serves as a key indicator for the health of commercial property markets, signalling a likelihood of increased occupancy demand across various sectors including office, industrial, retail, and alternative uses," Ms Rader said.

The growth has been widespread throughout Australia, with NSW leading in absolute numbers, adding 25,569 new businesses. Victoria followed with an increase of 18,641, while the ACT and Western Australia both demonstrated the highest percentage growth at 3.5 per cent.

Ms Rader said that the landscape of business sizes in Australia is also evolving, with significant implications for commercial property demand. "In 2023/24, non-employing businesses saw a substantial 4.9 per cent increase, adding 78,144 new entities," she said. "Simultaneously, larger businesses experienced notable growth, with a 5.7 per cent increase in companies employing 20-199 people and a 6.0 per cent rise in those with 200+ employees."

Industry-specific trends are shaping demand for various types of commercial properties, Ms Rader said. "The transport, postal and warehousing sector led growth with an 8.5 per cent increase, likely to drive continued demand for industrial and warehousing facilities," she said.

"Healthcare and social assistance followed with a 7.7 per cent rise, a segment likely to continue growing as our population ages,” Rader said. “This trend potentially boosts requirements for specialised medical facilities." Ms Rader said the robust growth in business numbers, particularly among larger enterprises, paints an optimistic picture for commercial property  demand across Australia. "With significant increases in key sectors like transport, healthcare, and financial services, the outlook for industrial, specialised medical facilities, and office spaces is especially promising," she said.