More than $50 billion in capital deployment is expected to flow into the property market as liquidity-driven opportunities emerge from major fund redemptions, according to a new report from Savills Australia and New Zealand.
The report says portfolio rebalancing and selective asset disposals are set to unlock deal activity, with industrial identified as the leading investment sector. Data centres are expected to benefit from rising AI-driven demand, while transactional activity is forecast across logistics, advanced manufacturing and cold storage.
Living sectors, including build-to-rent (BTR), are also forecast to sit high on investor demand, supported by demographic trends. The retail sector is expected to continue its recovery, supported by resilient consumer spending and limited supply.
Savills says 2026 will shape as a pivotal year for liquidity-driven investment conditions, triggering portfolio repositioning and competitive bidding for prime assets in core locations. ESG readiness is also emerging as a central performance metric.
“Opportunities will lie in prime assets, value-add strategies, and sectors aligned with structural demand, as investors focus on long-term positioning,” says Paul Roberts, Chief Executive Officer at Savills Australia & New Zealand.
“The global race for data centre capacity will further accelerate. AI is unlocking record levels of capital, as hyperscalers commit billions to new infrastructure, driving a rush for sites with land and energy security,” says Katy Dean, Head of Research at Savills Australia and New Zealand.
Savills expects continued market adaptation to ongoing global instability, with less impact on investment activity. Mr Roberts says many investors are holding significant undeployed capital.
“This pool of undeployed capital provides a hedge against the inflation and currency risk, and positions investors to capitalise on the new asset price cycle,” he says.
The report also highlights growing competition for sites near infrastructure, ports and transport hubs, alongside supply constraints linked to land scarcity, zoning and planning approvals. Sustainability requirements and mandatory climate reporting are expected to drive further repositioning, refurbishment and ESG-aligned upgrades across retail and office property.
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