New JLL research shows Western Australia’s move beyond traditional resources is driving fresh momentum across office, industrial and retail property markets.

Western Australia’s economy is at a pivotal moment, transitioning from a cycle dominated by traditional resources to one defined by strategic diversification that will fuel the next wave of real estate performance, according to new research from JLL.

The report, Capitalising on WA’s economic and real estate momentum, co-authored by JLL Real Estate Economist Ronak Bhimjiani and Research Analyst Helen Ye, outlines how this economic evolution is creating distinct pressures and opportunities across the state’s property markets.

JLL real estate economist Ronak Bhimjiani said the state’s economic strength is globally significant.

“Western Australia is not just a national outperformer; its key metrics stand out on globally.

“Perth leads all major G7 cities on core economic variables like economic growth, population growth, and employment growth over the past five years.

“This, combined with its upper quartile ranking among APAC cities for economic performance and quality of life, signals a market with exceptionally strong foundations,” Mr Bhimjiani said.

“This strength was built on WA’s growing dominance in global resources, with our analysis showing WA’s share of core global metals and mineral sales more than doubled from 4.7 per cent in 2000 to peak at approximately 10 per cent by 2024.

“That growth has now plateaued, signalling a critical inflection point

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“As demand patterns from traditional markets like China evolve, our future success will depend on strategic diversification into future-focused sectors like critical minerals, value-add processing, and defence.”

He highlighted the defence sector as a key catalyst for long-term industrial demand.

“The AUKUS agreement is a game-changer for WA.

“Our analysis shows that defence-related investment is poised to create a new pillar of demand for the industrial and logistics market, with the potential to more than double the sector’s industrial footprint by 2034.”

This economic transformation is directly reshaping the state's commercial real estate landscape. Angelo Amara, JLL Managing Director – WA, said the impacts are most pronounced in the office market.

“The ‘blue-chip’ asset pull has created a two-tiered office market, with a 90 per cent rental gap between prime and secondary assets.

“The most critical factor, however, is the supply outlook.

“With no new office completions expected until at least 2030, the market has a clear runway for vacancy compression driven purely by demand.

“Our base case scenario sees the vacancy rate falling from 17.1 per cent to a range of 11 to 13 per cent, which will intensify competition for premium space and drive asset values higher.

“Premium grade vacancy is estimated to decline below 5 per cent.

Key real estate performance indicators from the report include:

The industrial and logistics market is now Australia’s tightest, with a vacancy rate of just 2.0 per cent, as strong underlying demand meets a severely constrained supply pipeline.

Retail sector's investment value

WA’s retail sector is clearly defined as a high-growth, demand-led market, underpinned by strong population growth.

“This is boosted by strong household spending, which at 7.6 per cent is significantly outpacing the national average (4.2 per cent), creating favourable conditions for retailers.

“From an investment perspective, the outlook has become more nuanced,” Mr Bhimjiani concluded.

“While stronger-than-expected inflation has reduced the probability of near-term interest rate cuts, WA’s distinct economic drivers provide a buffer.

“This, combined with a higher yield profile relative to the east coast, reinforces Perth’s appeal as an attractive investment destination offering a compelling balance of value and growth potential.”