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Issue 13

Capital Edge Q4 2026

CBRE’s quarterly Capital Markets magazine, providing insights across all major sectors.
Capital Markets Team

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Flint Davidson

Head of Capital Markets, Pacific

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Welcome to the 13th edition of Capital Edge. Market uncertainty remains a defining feature of the investment landscape. Since our last edition, bond yields have continued to move higher, maintaining pressure on funding costs and reinforcing the prospect of a higher-for-longer debt environment. Australia is not navigating these conditions in isolation. Across global markets, investors are confronting many of the same challenges as central banks weigh persistent inflation, fiscal pressures and the outlook for economic growth.

Against this backdrop, the resilience of investment activity has been notable. Transaction volumes across all sectors are up 52% year-on-year, reflecting the intent of investors to look through short-term volatility. While we anticipate a softer finish to the year as available stock increases and buyers become increasingly selective, activity to date demonstrates that capital has been willing to move when high quality or well-priced opportunities emerge.

Higher levels of available stock, shallower pools of capital and continued rental growth are creating some of the most compelling acquisition opportunities we have seen in recent years. But this is not a market where all assets will perform equally. While pricing continues to recalibrate in some areas, high-quality assets with strong fundamentals and prime locations will continue to outperform. The distinction between these assets and secondary product is also becoming harder to ignore as capital continues to gravitate towards quality, while secondary assets and markets are facing greater pricing pressure as investors place more emphasis on asset fundamentals, income resilience, liquidity and risk-adjusted returns.

For buyers, the window remains open, but it may not stay open for as long as some expect. Recent volatility has reinforced how quickly market sentiment can change. A sustained improvement in debt markets, moderation in funding costs or greater certainty around the economic outlook could materially shift vendor expectations. As confidence returns, owners are likely to become increasingly reluctant to sell at what they perceive to be the low point in the cycle, reducing the availability of stock and intensifying competition for quality assets.

For investors with conviction, the current environment continues to reward decisive action. While uncertainty remains a defining feature of global markets, the opportunities emerging today may prove difficult to replicate once confidence returns and market conditions begin to normalise.

In this edition of Capital Edge, we explore how these dynamics are playing out across Australia’s commercial property markets, where opportunities are emerging and what investors should be watching as the market continues to recalibrate.

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CBRE strengthens Victorian Capital Markets team with Kate Pilgrim appointment

CBRE has appointed Kate Pilgrim as Senior Director, Capital Markets Office, further strengthening the firm’s Victorian platform following the recent appointment of Senior Director Sam Harrison.

Ms Pilgrim brings more than two decades of commercial property experience and a deep network across Victoria’s occupier and investor markets. She most recently served as Victorian Managing Director and Joint Head of Tenant Representation at JLL, having returned to the firm in 2024 after serving as Head of Customer and Marketing - Office at Charter Hall.

Before joining Charter Hall, Ms Pilgrim spent 17 years at JLL in advisory and leadership roles spanning occupier representation, corporate real estate and transaction management.

She will work in partnership with Mr Harrison, who joined CBRE from investment banking firm Barrenjoey, where he advised on complex real estate transactions, capital raising and funding solutions.

CBRE Pacific Head of Capital Markets Flint Davidson said the appointments combined complementary capabilities at a pivotal point in Melbourne’s office market cycle.

“Kate brings exceptional local knowledge, occupier insights, outstanding institutional relationships and complex negotiation skills, while Sam brings strong technical and capital markets expertise that has resonated with investors,” Mr Davidson said.

“Together, they form a formidable partnership and provide a highly credible, sophisticated alternative in the Melbourne office investment market.

“We believe Melbourne is positioned to benefit from improving investor sentiment. The market offers compelling relative value, and leasing fundamentals are strengthening, with the Eastern Core recording some of the country’s strongest net effective rental growth.

“Those conditions are creating opportunities as the market resets, and Sam and Kate give us the right combination of capital markets capability, local insight and intuitive occupier insights to help investors capitalise as confidence and transaction activity rebuilds.”

Ms Pilgrim said the opportunity to help build CBRE’s Victorian Office Capital Markets business was a strong drawcard.

“CBRE has a highly regarded platform and the opportunity to work in partnership with Sam and the broader team was compelling,” Ms Pilgrim said.

“Melbourne is entering a pivotal phase and I’m looking forward to helping clients identify opportunities and deliver strong outcomes.”

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