Darwin Market Monitor

Darwin Market Monitor 2026 Local market performance and insights

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Opportunity awaits in Darwin’s commercial market Darwin’s commercial property market continues to move in the right direction. Conditions remain sound, with rents and values continuing to recover. In some parts of the market, they are now likely sitting above the previous peak reached around 2012 to 2013.

This is not a market that is overheating. Instead, it remains steady, tight and increasingly well supported. Supply remains limited, new development is still difficult to make stack up and demand has held firm. Across several sectors, the gap between construction costs and end values is still restricting a meaningful wave of new supply.

Even so, that gap is narrowing as rents and values continue to improve, which is a positive sign for the market’s next phase.

The next leg up for Darwin will likely depend on some of the bigger economic drivers becoming more visible on the ground. Defence, mining, oil and gas, and major project activity all have the potential to lift demand across office, industrial and retail. For now though, Darwin remains well placed, with a market that is balanced, resilient and continuing to build momentum.

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The economy The Northern Territory economy is still moving forward, and the bigger lift looks to be ahead. Northern Territory State Final Demand rose 0.8% in the December quarter 2025, but was broadly flat across the 2025 calendar year, down just 0.2% on 2024.

That is not a booming result, but it does show the economy kept building, even before the next wave of LNG and project activity really starts to flow through.

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Population growth is also helping support the market.

ABS data shows the Territory’s population rose 1.4% over the year to 30 June 2025, taking the population to 264,400. For Darwin, that matters. It does not take a huge lift in people or jobs to have a noticeable impact on housing, office and industrial demand.

The labour market has also remained fairly solid.

Unemployment remains relatively low and wages continue to rise, which is supporting spending and business confidence.

Looking ahead, NT Government Budget Papers are more upbeat. They forecast stronger real GSP growth over the next two financial years. Supported

by Barossa moving into production, stronger LNG exports and ongoing project activity. Overall, the economic backdrop is improving.

Population is rising, the labour market remains sound and the next phase of major project activity should provide a solid base for Darwin’s commercial property market over the year ahead.

State & territory final demand (% change Sep 25 to Dec 25) 1.2% 1.2% 1.0% 0.8%

0.8% 0.7%

0.6%

1.5% 0.5%

0.4%

0.5% 0.3%

0.2% 0.0%

0.5%

0.1% SA

NT

VIC

NSW

ACT

WA

TAS

QLD

AUST

Source: ABS

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The office market Darwin’s office market remains stable, with A Grade continuing to be the strongest part of the sector. A Grade rents remain around $700 to $750 per sqm gross, with incentives at 0 to 5%. There have not been many recent deals, but that appears to reflect limited quality stock rather than weak demand.

The market is holding firm because supply at the better end remains tight.

B Grade has not improved as much as expected. There was a view last year that it would benefit from spillover demand out of A Grade, but that has not really happened. Rents remain stable at around $400 to $450 per sqm, incentives are around 10 to 15%, and demand has remained fairly flat.

C Grade is also broadly stable, with rents around $200 to $250 per sqm and incentives above 20%. The more notable shift has been on the supply side rather than demand.

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Some stock is being upgraded into B Grade, while some is being repurposed into other uses, including residential.

As a result, C Grade is not improving because demand has suddenly lifted, but because some weaker stock is gradually leaving the market in its current form.

On the supply side, the main project to watch is the Darwin Civic Centre redevelopment at 17 Harry Chan Avenue, Darwin City, where DCOH’s upper commercial floors will deliver around 10,000 sqm of net lettable office space.

Construction is already underway, with completion expected in 2028. It is attracting strong interest and should set a new benchmark rent for premium office space once completed. Importantly, the volume of new supply is not excessive, so it is unlikely to materially soften the broader A Grade market over the year ahead.

Overall, office demand remains fairly flat. The outlook is steady rather than spectacular, but the market continues to be supported by tight supply at the top end.

The next genuine lift in office demand will likely need to come from outside the sector itself, whether that is defence, oil and gas, or another major project flowing through into real demand for space.

Office market metrics Leasing Q1 2024 Sector

Office

Q1 2025

Q1 2026

OUTLOOK TO Q1 2027

Grade

Avg Gross Rent $/sqm

Incentive

Avg Gross Rent $/sqm

Incentive

Avg Gross Rent $/sqm

Incentive

Rent

Incentive Demand Supply

A

$525-$575

5-10%

$700-$750

0-5%

$700-$750

0-5%

Stable

Stable

Stable

Stable

B

$350-$400

10-15%

$400-$450

5-10%

$400-$450

10-15%

Stable

Stable

Stable

Stable

C

$200-$250

20% +

$200-$250

20%+

$200-$250

20%+

Stable

Up

Down

Stable

Sales Q1 2024

Q1 2025

Avg Sales Price $/sqm

Office

$3,500 -$4,500 7.0% - 8.0% $4,000-$5,000 7.5% - 8.5% $4,000-$5,000 7.5% - 8.5% Stable Stable Stable Stable

Yield

Avg Sales Price $/sqm

OUTLOOK TO Q1 2027

Sector

Yield

Avg Sales Price $/sqm

Q1 2026 Yield

Value Supply Demand Yield

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Strata office market The more interesting story is the longer-term opportunity.

There is still good demand for quality strata office, but the current stock is not really meeting that demand. If genuinely new strata office product came to market with better design, presentation and overall quality, Darwin could likely support higher rents and sale rates than the existing stock suggests.

consistent, particularly at the lower price point under $1 million, where buyers have so far been relatively resilient to higher interest rates.

The strata office market remains a small but resilient part of Darwin’s commercial property market. It continues to appeal to private investors, including mum and dad investors and self-managed super funds, looking for relatively affordable commercial assets with stronger yields than many residential investments.

Investor demand remains a key feature of this segment.

Buyers are mainly investors rather than owner occupiers, with a large share of demand coming from interstate.

Darwin’s relatively affordable entry price and stronger yield profile compared with southern markets continue to support that interest.

Conditions across both prime and secondary strata office remain fairly stable. There has not been a major shift in rents or incentives, and the smaller end of the market is generally holding up well. Demand in the sales market also remains

That is the key point. The issue is not weak demand, it is the lack of newer quality product. The available stock is generally older, and there has not been enough new supply to reset the market.

Strata office market metrics Leasing Q1 2024 Sector

Strata Office

Q1 2025

Q1 2026

OUTLOOK TO Q1 2027

Grade

Avg Net Avg Net Avg Net Incentive Incentive Incentive Rent $/sqm Rent $/sqm Rent $/sqm

Rent

Incentive Demand Supply

Prime

$300-$350

5-10%

$300-$400

5-10%

$300-$400

5-10%

Stable

Stable

Stable

Stable

Secondary $200-$250

10-20%

$200-$250

10-20%

$200-$250

10-20%

Stable

Stable

Stable

Stable

Sales Q1 2024 Sector

Avg Sales Price $/sqm

Strata $3,500 - $4,500 Office

Q1 2025 Yield

7.0% - 8.0%

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Avg Sales Price $/sqm

Q1 2026 Yield

Avg Sales Price $/sqm

OUTLOOK TO Q1 2027 Yield

Value Supply Demand Yield

$4,000-$5,000 7.5% - 8.5% $4,500 - $5,500 7.0% - 8.0% Stable Stable Stable Stable

Strata industrial market Leasing conditions have improved, with prime strata industrial rents now around $180 to $250 per sqm. On the sales side, values have also lifted, with prime strata industrial pricing now around $2,250 to $3,000 per sqm, while yields remain around 7.5% to 8.0%.

The segment is benefiting from many of the same trends supporting the broader industrial market. Demand remains solid, quality stock is limited, and buyers and occupiers continue to value functional, well presented assets. As a result, strata industrial is becoming a more established and better defined part of Darwin’s industrial market.

Strata Industrial market metrics Sales

Leasing

Q1 2026

Q1 2026 Sector

Strata Industrial

Grade

Avg Nett Rent $/sqm

Incentive

Prime

$180 - $250

10%

Secondary

$150 - $200

10% - 15%

Sector

Strata Industrial

Grade

Avg Sales Price $/sqm

Yield

Prime

$2,250 - $3,000

7.5% - 8.0%

Secondary $1,800 - $2,500

7.5% - 8.0%

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Industrial market preferred. That is reinforcing the strength of better quality assets and helping keep supply tight at the more desirable end of the market.

Sales values have also moved higher over the same period, showing that improved leasing conditions are now flowing through into capital values as well.

Industrial remains the standout sector in Darwin’s commercial market. Prime industrial rents have lifted to around $170 to $200 per sqm, reflecting a clear improvement in conditions over the past two years.

Prime rents have increased materially from around $130 to $150 per sqm in Q1 2024 to $170 to $200 per sqm in Q1 2026, highlighting the strength of the sector.

The outlook remains positive.

Demand is firm, supply is tightening, and there is still room for further upside if defence spending continues to flow through and major projects move from pipeline discussion into real activity on the ground. As it stands, industrial remains the strongest and clearest part of the Darwin commercial market story.

Demand remains broad based, with no single sector or occupier group driving the market. Instead, activity is being supported by a range of users, which is helping keep conditions firm across the sector. The market is also becoming more quality focused. Occupiers are increasingly favouring newer buildings that meet current standards and requirements, while older stock still has a role but is becoming less

Secondary rents have also improved, although more modestly, reinforcing that the strongest conditions remain at the better quality end of the market.

Industrial market metrics Leasing Q1 2024 Sector

Industrial

Q1 2025

Q1 2026

OUTLOOK TO Q1 2027

Grade

Avg Gross Avg Gross Avg Gross Incentive Incentive Incentive Rent $/sqm Rent $/sqm Rent $/sqm

Rent

Incentive Demand Supply

Prime

$130-$150

10%

$160-$180

5-10%

$170-$200

5-10%

Stable

Stable

Stable

Stable

Secondary

$90-$110

10-20%

$100-120

10%

$100-120

10%

Stable

Stable

Stable

Stable

Sales Q1 2024 Sector

Avg Sales Price $/sqm

Q1 2025 Yield

Industrial $1500-$2000 6.75% - 7.75%

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Avg Sales Price $/sqm

Q1 2026 Yield

Avg Sales Price $/sqm

OUTLOOK TO Q1 2027 Yield

Value Supply Demand Yield

$1750-$2500 7.00% - 8.00% $1750-$2500 7.00% - 8.00% Stable Stable Stable Stable

Land market Industrial land remains steady.

Sale prices are still sitting around $250 to $300 per sqm, supply remains abundant and demand is mostly coming from users with a genuine requirement rather than speculative buyers.

The more important point is what sits behind those numbers. Darwin is getting closer to feasible development. As rents and asset values continue to improve, the gap between end value and development cost is narrowing, and there are more discussions happening in the market around potential opportunities.

Land market metrics

The challenge is that if you simply buy land and build at today’s full market construction cost, a standard industrial shed project still does not always stack up comfortably. So industrial land feels like a market edging towards its next phase, rather than one that has fully entered it. The demand is there, the interest is there and the discussion is active, but feasibility is still not quite there across the board.

Sales Q1 2025

Q1 2026

OUTLOOK TO Q1 2027

Sector

Avg Sales Price $/sqm

Avg Sales Price $/sqm

Value

Supply

Demand

Yield

Industrial Land

$250 - $300

$250 - $300

Stable

Stable

Stable

Stable

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Retail market Retail remains the softest part of Darwin’s commercial property market. Leasing conditions have not changed much from last year, with neighbourhood and central retail rents broadly holding at similar levels and demand remaining subdued. That said, the market is not falling away, it is more a case of stability without a lot of momentum.

The broader trend is familiar.

Darwin is seeing the same shift as many other markets, with traditional bricks and mortar retail continuing to face pressure and vacant

space increasingly being taken up by service-based occupiers rather than traditional retailers. Medical, health, lifestyle and other service uses are becoming more prominent, while CBD retail remains fairly flat.

even while broader leasing demand remains patchy. The redevelopment of Casuarina Square is a good local example, showing there is still confidence in well-located retail assets with strong catchments.

There is also a clear split within the sector. Neighbourhood and convenience-based retail continues to hold up better than more discretionary formats, supported by daily needs spending and essential services. That helps explain why suburban centres are proving more resilient,

On the investment side, values and yields are broadly unchanged, but the bigger issue is demand. Investor demand is limited, occupier demand is also limited, and that is keeping the sector softer than the rest of the market.

Retail market metrics Leasing Q1 2024 Sector

Q1 2025

Q1 2026

OUTLOOK TO Q1 2027

Avg Gross Avg Gross Avg Gross Rent $/ Incentive Rent $/ Incentive Rent $/ Incentive sqm sqm sqm

Grade

Rent

Incentive Demand Supply

Neighbourhood/ Strip retail

$300 $400

20%

$300 $400

20%

$300 $400

20%

Stable

Stable

Stable

Stable

Central

$700 $900

20%

$700 $900

20%

$700 $900

20%

Stable

Stable

Stable

Stable

Retail

Sales Q1 2024

Q1 2025

Q1 2026

Sector

Avg Sales Price $/sqm

Yield

Avg Sales Price $/sqm

Yield

Avg Sales Price $/sqm

Retail

$3,000 $5,000

6.75% - 7.75%

$3,000 $5,000

7.00% - 8.00%

$3,000 $5,000

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OUTLOOK TO Q1 2027 Yield

Value Supply Demand Yield

7.00% - 8.00% Stable Stable Stable Stable

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Alternative asset classes Alternative assets are becoming a more important part of Darwin’s commercial property story. Rather than one single theme driving this part of the market, activity is emerging across a number of areas, particularly data centres, childcare and hotel repositioning.

The data centre project under way remains one of the more notable developments in Darwin, with one facility already delivered and another moving ahead soon after.

That points to genuine demand in specialised digital infrastructure and adds another layer to Darwin’s commercial property market beyond the traditional office,

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retail and industrial sectors.

Childcare is also worth noting.

A couple of new centres are being developed, with operators expanding their footprint. It is not a major market driver on its own, but it does highlight ongoing demand for service-based and essential-use property.

Hotels are another area where activity is picking up. Darwin is seeing more repositioning and adaptive re use, including the conversion of the former commercial office building at 87 Mitchell Street, Darwin City into voco Darwin Suites, a new 88-suite hotel in the CBD. Refurbishment works are also occurring across

existing hotel stock, including on the Esplanade. That is an encouraging sign. It shows there are opportunities for older commercial buildings to be repositioned into uses that better match current demand, rather than remaining in formats where occupier depth is more limited.

Student accommodation is still part of the broader conversation, but it is no longer as strong a theme as once expected, largely because the volume of students arriving has not been as high as anticipated. The stronger themes for now are in digital infrastructure, service-based property and adaptive re use.

Market outlook The broad view is that Darwin’s commercial property market is performing well. Rents and values are continuing to recover, demand remains relatively consistent and parts of the market have likely moved beyond the previous cycle peak. At the same time, this does not appear to be a market running too hard.

Rather, it is being supported by steady demand and limited new supply.

That supply constraint remains a key part of the story. In Darwin’s case, it is not just about confidence, it is also about feasibility.

Construction costs and end values still do not align well enough to trigger a broad wave of new development. In the short term, that is helping

keep the existing market tight. As rents and values continue to improve, that gap is narrowing, and Darwin looks to be edging closer to the point where more projects can start to stack up.

The main upside remains the project pipeline. Defence, mining, oil and gas are all moving in the right direction, and the broader economic backdrop is improving.

Population is rising, activity remains solid and NT Government Budget Papers point to a stronger next phase as LNG exports and major project activity gather pace.

The key question is how much of that pipeline turns into real economic growth, better paid jobs and more people on the ground in Darwin.

If that happens, Darwin could tighten quite quickly across several parts of the market.

Office would benefit from stronger occupier demand, industrial would likely see another lift, and broader business confidence would improve. Even if that uplift takes longer to fully emerge, the market still looks well placed. Industrial remains the standout, office is stable but selective, retail is softer, and overall conditions remain steady, supply constrained and positive.

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