Unlock deeper understanding of tenant dynamics.
The Tenant Health Index (THI) provides a clear, data-driven assessment of tenant occupancy health across Australia.
The Re-Leased platform captures live rental collection data directly from over 80,000 unique leases from across the country. The report looks at the Australian picture and also provides segmented analysis across major property asset classes (Office, Industrial, Retail and Hospitality).
This report does not rely on surveys or secondary collections, and the data has been collected, anonymised and aggregated in line with the Re-Leased Terms and Conditions as at the time of publishing .
The Tenant Health Index provides a detailed view of tenant dynamics within commercial properties, offering insights into key performance areas. High collection rates ensure reliable cash flow, while strong tenant retention reflects long-term stability and enduring relationships. Robust rent retention shows the preservation of rental income, even when tenants change. Additionally, the Rent to Lease Retention Variance highlights shifts in rental income relative to tenant retention, providing valuable information for pricing and negotiation strategies.
By combining these metrics, the Tenant Health Index empowers landlords and investors to benchmark tenant health, enabling more informed decisions that optimise property performance and investment strategies.
This measures the percentage of rent that is paid within 30 days of the due date, reflecting how reliably tenants are meeting their payment obligations. A high collection rate indicates strong financial health and cash flow consistency.
Average collection rate: 98.7%
Australia’s commercial real estate market is showing positive rent collection trends, with the vast majority of tenants across all sectors paying their rent on time. While the overall risk of arrears is low, there is a variability in hospitality and retail, suggesting that some businesses may be facing financial pressures.
Average collection rate: 99%
Office rent collection rates during this 12-month period are consistently high, with only minor fluctuations, suggesting a healthy and stable office rental environment in Australia. This is a notable improvement from the May 2020 rent collection low of 77%. With collection rates ranging from 98.6% to 99.2%, this data reflects strong market fundamentals and effective rent recovery practices across the sector.Invoice Due Month | Oct-23 | Nov-23 | Dec-23 | Jan-24 | Feb-24 | Mar-24 | Apr-24 | May-24 | Jun-24 | Jul-24 | Aug-24 | Sep-24 |
Collection Rate | 98.8% | 98.6% | 98.9% | 99.0% | 99.1% | 99.2% | 99.2% | 99.0% | 99.0% | 99.0% | 99.0% | 99.2% |
Average collection rate: 98.62%
Retail rent collection in Australia is solid, having fully recovered from the lows of 51% in April 2020. Although the sector shows similar variability to hospitality, most tenants are meeting their obligations. Certain businesses may still be grappling with the challenges of adapting to new consumer behaviours, such as the ongoing shift to online shopping. Retail landlords may need to keep a close eye on tenants in non-prime locations to mitigate any potential arrears.
Invoice Due Month | Oct-23 | Nov-23 | Dec-23 | Jan-24 | Feb-24 | Mar-24 | Apr-24 | May-24 | Jun-24 | Jul-24 | Aug-24 | Sep-24 |
Collection Rate | 98.6% | 97.0% | 98.6% | 98.6% | 98.8% | 98.9% | 99.0% | 98.9% | 98.9% | 98.7% | 98.7% | 98.6% |
Average collection rate: 99%
Industrial rent collection remains a standout performer in Australia with a near 100% of rent collected. Tenants are paying their rents consistently, with minimal deviation across months. While this sector has strong financial health, an emerging trend is reassuring for landlords, indicating little to no arrears risk.
Invoice Due Month | Oct-23 | Nov-23 | Dec-23 | Jan-24 | Feb-24 | Mar-24 | Apr-24 | May-24 | Jun-24 | Jul-24 | Aug-24 | Sep-24 |
Collection Rate | 98.5% | 99.2% | 99.2% | 99.1% | 99.2% | 98.7% | 98.9% | 99.1% | 99.2% | 99.1% | 98.9% | 98.8% |
Average collection rate: 98.06%
The hospitality and leisure sector in Australia shows reliable rent collection. While most tenants are meeting their obligations, some variability suggests that certain businesses may still be facing challenges due to ongoing economic recovery or market pressures.
Invoice Due Month | Oct-23 | Nov-23 | Dec-23 | Jan-24 | Feb-24 | Mar-24 | Apr-24 | May-24 | Jun-24 | Jul-24 | Aug-24 | Sep-24 |
Collection Rate | 98.1% | 98.0% | 97.6% | 97.3% | 98.1% | 98.4% | 97.7% | 98.9% | 98.6% | 98.5% | 98.5% | 96.8% |
Based on the dataset provided and industry trends, we can identify several key insights regarding tenant retention, rent retention, and the rent to lease retention variance in the Australian commercial real estate market, particularly in sectors such as industrial, office, retail, and hospitality.
Tenant retention rates across sectors reflect the stability and loyalty of tenants over a 12-month period. In the dataset:
Rent retention tracks the amount of rent retained from tenants who stay in the property year-over-year. The dataset reveals:
The variance between rent retention and tenant retention reflects how much more (or less) retained tenants are paying compared to the previous year:
The office sector continues to experience pressure from the shift towards hybrid work models, however, tenants are showing a willingness to invest in premium spaces. The positive rent-to-lease retention variance suggests that businesses staying in offices are choosing higher-quality, flexible environments, even at slightly increased rates. This reflects a growing preference for modern, adaptable workspaces among those committed to maintaining physical offices.
JLL Head of Research – Australasia, Andrew Ballantyne said, “Organisations have been observing changes in workplace patterns and have more confidence in what their occupational footprint will look like moving forward. We see more conviction in decision-making and the positive net absorption result highlights the net balance of organisations are seeking more office space.”
Retail faces significant structural challenges as consumer behaviour shifts towards online shopping. The lower tenant retention rate highlights frequent turnover, but the positive rent to lease retention variance suggests that remaining tenants in prime locations can afford higher rents. This indicates a growing segmentation within the retail market, where successful tenants can withstand rent increases while others struggle.
KPMG highlight that Retail recovery has stalled in Aus and positive health is not forecasted until 2025 the stabilisation of wages reflect a softer labour market. Despite growth in employment across food and non food retail there has been a recoded 8000 drop in job vacancies.
The industrial sector remains a strong performer in the Australian CRE market, though recent shifts are evident. Demand for logistics and warehousing continues, fuelled by e-commerce growth, yet vacancy rates are gradually rising in some metro areas as sublease options increase, especially in larger facilities. While this has moderated rental growth from previous highs, tenant retention remains robust, reflecting competition for prime spaces. In areas with limited new supply, landlords can still secure rent increases, highlighting the sector's resilience and solid long-term prospects. The positive variance indicates that retained tenants are paying more, underscoring the sector’s resilience.
"JLL’s latest Q3 2024 Australia industrial data shows that vacancy rates are starting to gradually trend upwards in some precincts across Australia’s metropolitan areas, partly driven by the increase in sublease availability in larger warehouse facilities. This has dampened face rental growth over 2024 (off a high base) and has resulted in a gradual uptick in incentives. A combination of these factors has resulted in Australian industrial prime net effective rents decreasing by 1.8% over the quarter to Q3 2024, although effective rents are still up 3.1% over the past year.
It’s important to note that industrial demand levels remain robust, so in precincts where there is stable demand and low levels of supply completions, positive rent growth is still being recorded."
Hospitality & Leisure properties show strong rent retention relative to tenant retention, which may be due to a post-pandemic recovery in consumer activities such as dining and entertainment. The positive variance indicates that landlords are successfully raising rents on renewed leases or benefitting from an increased willingness to pay in high-demand locations.