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Commercial Real Estate Live Data

AUSTRALIA

Tenant Health Index

Unlock deeper understanding of tenant dynamics.
The Tenant Health Index (THI) provides a clear, data-driven assessment of tenant occupancy health across Australia.

 

 

The Tenant Health Index indicates a renewed stability for Australia's commercial property occupiers.

The Tenant Health Index is a new and comprehensive data analysis tool developed to assess the stability and health of commercial property occupiers. Its uses three core streams of metrics that when combined provide a detailed view of the occupier market.

The THI analysed the Industrial, Retail, Office and Hospitality & Leisure sectors in the 12 months to September 2024, using live data from 80,000 leases.  

Key Findings

Average AU CRE Rent Collection Rates

 

  • The average rent collection rate hit 99% across the four asset classes in the 12 months to September 2024, back to 2019 pre-covid rates
  • The average tenant retention rate, the percentage of occupiers remaining after 12 months, stood at 78% 
  • The average rent retention rate, which compares the levels of rent paid by retained tenants to the previous year, was 86%
  • Retail, with an average rent collection rate of 98.62%, saw the strongest recovery among the four asset classes, bouncing back from historical lows of 54% in 2020
  • All four asset classes had a positive variance between rent to lease retention indicating rental growth 
  • While the industrial sector continues to thrive in many areas, with a rent retention of 86%, certain precincts are beginning to experience softened demand.
  • Hospitality & Leisure is showing positive signs of recovery with a healthy tenant retention rate of 83% 
  • Office despite a lower tenant retention rate of 76% still recorded a high rent retention rate of 85%, suggesting that occupiers that stay are willing to pay more for the right space 
  • Retail, battling the flight to online shopping, recorded the lowest occupier retention rate of 73%, reflecting a sector still in flux. But with its rent retention rate at 83% and largest rent increase at 10.42%, indicates a willingness from tenants to pay a premium rent to secure their prime stores or locations
“The Tenant Health Index reveals renewed stability for Australia’s commercial property occupiers, with rent collection rates back to 2019 levels. While Industrial continues to show strength, demand is softening in certain precincts. Hospitality & Leisure are rebounding with robust tenant retention, and Office and Retail are navigating structural changes as occupiers pay premium rents to secure prime locations. Although nuanced, tenant retention and rent growth across sectors signal a promising trajectory for Australia’s CRE market.” — Tom Wallace, CEO of Re-Leased.

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