Strata is one ownership structure, but it does not price the same way in every sector. Arealytics sales data shows office and industrial strata moving in opposite directions relative to freehold.
Office strata trades wider
Office strata traded at wider average yields than freehold across most major markets: +140 bps in Greater Perth (5.9% against 4.5%), +110 bps in Greater Melbourne (7.0% against 5.9%), +60 bps in Greater Sydney (5.8% against 5.2%) and +30 bps in Greater Adelaide (6.0% against 5.7%). Greater SEQ was the exception, with office strata sitting 20 bps below freehold, at 6.3% against 6.5%.
Industrial flips the trend
In industrial, strata sat 60 bps below freehold in Greater SEQ (4.8% against 5.4%), 40 bps below in Greater Perth (4.7% against 5.1%) and 30 bps below in Greater Melbourne (4.6% against 4.9%). Greater Sydney (+20 bps) and Greater Adelaide (+40 bps) went the other way, with industrial strata yielding slightly more than freehold.
Two sectors, two kinds of capital
The difference comes down to how capital is competing for each sector. Industrial strata benefits from strong owner-occupier and private-investor demand, particularly for well-located stock where ownership opportunities are limited, supporting sharper pricing and lower yields.
In office, investors remain more focused on income security, asset quality and control, giving quality freehold assets an advantage as the sector moves further into price discovery.
The result is two very different risk-adjusted return profiles from the same ownership structure.
| Market | Office strata | Office freehold | Office spread | Industrial strata | Industrial freehold | Industrial spread |
|---|---|---|---|---|---|---|
| Greater Sydney | 5.8% | 5.2% | +60 bps | 4.2% | 4.0% | +20 bps |
| Greater Melbourne | 7.0% | 5.9% | +110 bps | 4.6% | 4.9% | −30 bps |
| Greater SEQ | 6.3% | 6.5% | −20 bps | 4.8% | 5.4% | −60 bps |
| Greater Perth | 5.9% | 4.5% | +140 bps | 4.7% | 5.1% | −40 bps |
| Greater Adelaide | 6.0% | 5.7% | +30 bps | 5.6% | 5.2% | +40 bps |
Compare strata and freehold yields in your market.
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