Market Lens Snapshot
Australia | Q3 2026
July, August and September 2026
Asset Classes: Office Industrial Retail
At a glance
- Retail moves against the quarterly rebound. Its average starting term fell 7.5% from Q2 to 34.4 months, the lowest in Re-Leased’s series. Office and industrial lengthened, but all three remained below Q3 2025.
- Industrial’s short-term mix is concentrated in one-to-three-year agreements. These accounted for 50.6% of Q3 starts, while its share under twelve months fell year on year.
- Similar tenant retention does not mean identical income retention. Office and retail retained almost the same share of tenants, at 74.8% and 74.6%, but rent retention differed: 85.1% versus 82.5%. Industrial led collection, while office led both retention measures.
Sector summary, Q3 2026
| Measure | Office | Industrial | Retail |
|---|---|---|---|
| Average starting lease term, Q3 2026 | 31.3 months | 29.2 months | 34.4 months |
| Change from Q3 2025 | −3.9% | −4.3% | −6.8% |
| Q3 starts under three years | 52.9% | 55.8% | 48% |
| Tenant retention | 74.8% | 73.2% | 74.6% |
| Rent retention | 85.1% | 83.3% | 82.5% |
| Average rent collection, Q3 2026 | 97% | 98.7% | 98.6% |
Lease lengths cover Q3 2026 starts. Retention compares September 2025 with September 2026. Average rent collection covers July–September 2026.
Lease lengths: retail continues to shorten despite rebounds elsewhere
All three sectors remain below last year
Office’s average starting term rose 4% from Q2 to 31.3 months, while industrial’s rose 4.5% to 29.2 months. Retail moved in the opposite direction, falling 7.5% to 34.4 months.
The year-on-year comparison was weaker across all three sectors: office was down 3.9%, industrial 4.3% and retail 6.8%. Each recorded its lowest Q3 average in the series. Retail remained the longest of the three despite its sharper decline.
The January–September averages were also lower than in 2025, by 5.2% for office, 6.8% for industrial and 5.5% for retail. The office and industrial quarterly rebounds had not reversed the broader reduction.
Against Q3 2019, the pre-pandemic baseline, average starting terms are around a third shorter in every sector. Office fell from 46.7 to 31.3 months (−32.9%), industrial from 45.9 to 29.2 months (−36.4%) and retail from 53.9 to 34.4 months (−36.2%). These are different groups of commencing leases—not the same leases tracked over time.
Average lease length (months)
By asset class, Q3 observations, 2019–2026. Hover or tap the chart to see values.
| Asset class | Q3 2026 vs Q2 2026 | Q3 2026 vs Q3 2025 | Jan–Sep 2026 vs Jan–Sep 2025 | Q3 2026 vs Q3 2019 |
|---|---|---|---|---|
| Office | +4% | -3.9% | -5.2% | -32.9% |
| Industrial | +4.5% | -4.3% | -6.8% | -36.4% |
| Retail | -7.5% | -6.8% | -5.5% | -36.2% |
Average starting lease length in months by asset class, Q3 observations from 2019 to 2026.
One-to-three-year terms dominate - not sub-year agreements
Industrial had the largest share of starts under three years at 55.8%, followed by office at 52.9% and retail at 48%. The one-to-under-three-year band was the largest in every sector.
In industrial, this band alone accounted for 50.6% of all starts. Its share under twelve months fell year on year to 5.2%, so the rise in short-term leasing was concentrated in one-to-three-year commitments rather than sub-year agreements.
Retail retained the widest spread: the largest share under twelve months, at 8.1%, alongside the largest share at five years or more, at 23.9%. Its average and distribution therefore need to be read together rather than treating retail as uniformly short-term.
Leases by term length
Distribution of starting lease terms (months), Q3 observations, 2019–2026. Select an asset class, then hover or tap a bar to see values.
Distribution of starting lease terms by sector, Q3 observations from 2019 to 2026.
Terms under three years
Share of starting lease terms under 36 months, Q3 observations, 2019–2026. Hover or tap the chart to see values.
Share of starting terms under 36 months, Q3 observations from 2019 to 2026.
The under-three-year share increased year on year in every sector, led by retail’s six-percentage-point rise. Within 2026, office and industrial’s shares fell from Q2 as their averages lengthened, while retail’s share increased. The annual shortening pattern was not a uniform quarterly movement.
| Asset class | Q3 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
|---|---|---|---|---|
| Office | 51.9% | 53.6% | 56.1% | 52.9% |
| Industrial | 52.6% | 58.7% | 59.9% | 55.8% |
| Retail | 42.0% | 45.2% | 44.4% | 48.0% |
Market context: shorter commitments can coexist with rental growth.
Retail: CBRE’s Q3 2026 retail figures recorded the strongest rent growth at the prime end: CBD super prime net face rents rose 9.2% year on year, compared with 2.6% for sub-regional centres. It also described retailers taking a more measured approach to expansion. Shorter commitments sit alongside rental growth in some locations, rather than proving uniform weakness.
Office: CBRE’s Q3 research reported enquiries up 6% year to date, but not yet translating into higher leasing volumes, partly as relocation costs encouraged renewals. That supports assessing the cost and value of a commitment—not just its duration.
Industrial: Cushman & Wakefield described a move from scarcity towards a more balanced market, with improved incentives giving occupiers greater negotiating scope. This provides context for lease structures without establishing why the Market Lens terms changed.
Tenant health: similar tenant retention, different income outcomes
Office and retail retained almost the same share of tenants, at 74.8% and 74.6%, but office retained a larger share of rent: 85.1% versus 82.5%. Tenant retention across all three sectors spanned only 1.6 percentage points. The rankings are useful, but do not, on their own, establish a materially stronger or weaker sector.
Q3 collection remains high, with industrial and retail closely grouped
Average rent collection was 98.7% for industrial, 98.6% for retail and 97% for office in Q3. Industrial and retail were just 0.1 percentage points apart. Collection measures rent paid within thirty days of its due date. Office’s quarterly average was below its 98% full-year average, although September collection reached 98.5%.
Australia: average rent collection rate
Percentage of rent paid within 30 days of the due date
| Asset class | Avg. Oct 2025–Sep 2026 | Avg. Q3 2026 | Sep 2026 |
|---|---|---|---|
| Office | 98% | 97% | 98.5% |
| Industrial | 98.8% | 98.7% | 98.4% |
| Retail | 98.6% | 98.6% | 98.5% |
Source: Re-Leased Market Lens, Tenant Health 2026. Retention: September 2025 to September 2026. Collection: October 2025 to September 2026.
The quarterly and full-year windows overlap, so the comparison does not establish a quarter-on-quarter trend. It does show that collection and retention need separate attention: office led retention despite its lower Q3 collection result.
Office leads retention; similar tenant counts conceal different rent outcomes
Office recorded 74.8% tenant retention and 85.1% rent retention, leading both Australian measures. Industrial had the lowest tenant retention at 73.2%, despite leading collection. Retail’s tenant retention of 74.6% was close to office’s, but its rent retention was the lowest at 82.5%.
Australia: tenant and rent retention by sector
Source: Re-Leased Market Lens, Tenant Health 2026. Retention: September 2025 to September 2026. Collection: October 2025 to September 2026.
Office and retail show why tenant retention alone is not enough. Their tenant-retention rates were only 0.2 percentage points apart, yet office retained a larger share of rent. The rent represented by tenants staying or departing matters as well as the number of tenants.
Rent retention exceeded tenant retention in all three sectors. This can reflect rent changes, additional space or the mix of tenants staying and leaving; the gap does not establish individual rent growth or explain departures. Retail also recorded the lowest rent retention within each of the other two countries, making it the shared sector watchpoint across the report.
Industrial led collection and had the lowest tenant retention of the three sectors, but its 73.2% tenant-retention rate was only 1.6 percentage points below office’s. This is a difference in ranking, not evidence of a sharply weaker tenant base. The results describe separate cohorts and periods, not proof that the best-paying individual tenants departed.
The takeaway
Australia’s longer-term shift towards shorter commitments remains intact despite the office and industrial Q3 rebounds. Retail reached a series-low average, while average starting terms in every sector remained around a third below the pre-pandemic baseline.
Similar tenant retention can sit alongside different income outcomes. Office and retail retained almost the same proportion of tenants, but office retained a larger share of rent. Industrial led Q3 collection, marginally ahead of retail; the collection ranking alone does not describe tenant or income continuity.
For landlords, the useful next step is to connect these benchmarks to their own portfolios: how much rent is attached to upcoming lease decisions, and what would it cost to retain or replace that income?
About the data
Market Lens is Re-Leased’s proprietary research, drawing on anonymised, aggregated data from more than 500,000 commercial leases. This report covers office, industrial and retail markets across Australia.
- Lease length measures the full starting term of leases commencing in the reporting period, not the remaining term of existing leases. Term-band shares are count-based, not rent-weighted.
- Tenant retention measures the percentage of tenants remaining after twelve months.
- Rent retention measures rent paid by retained tenants compared with the previous year.
- Rent collection measures the percentage of rent paid within thirty days of its due date.
- Retention gap is rent retention minus tenant retention, expressed in percentage points.
Lease lengths and tenant retention provide complementary views of portfolio performance, rather than tracking the same group of tenants. Figures are rounded, and historical results may be revised as data coverage expands.
Explore the full research
This snapshot draws on two Market Lens reports from Re-Leased: Lease Lengths in Focus | Q3 2026, examining starting lease terms across office, industrial and retail, and Tenant Health 2026, benchmarking rent collection, tenant retention and rent retention across New Zealand, Australia and the United Kingdom.