The NSW Southern Highlands commercial property market is shaping as a two-speed market, which will create opportunities for owner-occupiers and investors considering a 2026 sale.

While industrial supply has surged and buyer demand has softened, tightly held retail and office properties are being snapped up quickly.

According to Lisa O’Neill, Director, Raine & Horne Commercial Southern Highlands, industrial development has been strong across the region, but the volume of new stock has created a temporary oversupply.

“Things are moving, particularly in industrial, but there’s just so much new stock,” Lisa explains. “We’re seeing plenty of new developments and boutique-style industrial warehouse complexes hitting the market at the same time, which has created a lot of choice for buyers.”

As a result, while many small industrial units, typically in the 300 to 500 square metre range, are leasing well, they’re proving slower to sell. “Prospective buyers have the advantage of selection and are taking their time before committing to a purchase,” Lisa said.

“These units are leasing strongly, but purchasers are holding off because there are so many available,” Lisa says. “There’s no urgency when buyers can choose from multiple options.”

Smaller warehouse units with mezzanine levels, often measuring around 100 to 168 square metres, are selling in the $500,000 to $600,000 price bracket, with rents averaging around $600 per week. Lisa said, “This equates to solid 6.5% -7.5% net yield for investors, but the abundance of supply means sales transactions are taking longer than usual to finalise.”

Retail and office in demand

In contrast, the retail and office sectors are benefiting from significantly tighter supply and strong demand from local owner-occupiers and investors.

“We’re actually selling a good level of retail and office space at the moment, which has been quite rare since the COVID-19 years,” Lisa notes. “There’s far less of office and retail available, so when a quality asset comes up, it gets snapped up.”

To illustrate, with a price guide of $795,000 to $885,000, Raine & Horne Commercial Southern Highlands has listed a prime retail opportunity at 3/458 Argyle Street, Moss Vale[i], home to the long-standing clothing and tailoring institution Whytes, established in 1895.

“Many buyers attracted to assets such as the Whytes property are self-managed super funds or local investors seeking long-term security by purchasing their own premises,” Lisa said.

“They are looking to secure main street retail or office properties as income-producing investments, often through self-managed super funds (SMSFs).

“We’re seeing a lot of mum-and-dad investors and SMSF buyers,” Lisa added. “They’re looking for stable income and a tangible asset, and the Southern Highlands offers both.”

Similarly, office spaces are attracting strong enquiry whenever they become available, but supply is extremely limited.

“There’s very little office space around,” Lisa says. “They can sit for a while, but then suddenly there’s nothing available and buyers are competing for what’s left. If you own an office in the Southern Highlands and are thinking of selling, now is a very good time.”

Recent transactions highlight strong demand. One office-style premises at
81A Main Street, Mittagong, priced around $595,000[ii], has already attracted an offer, while another office sale late last year achieved just over $1 million.

Rapid momentum for Raine & Horne Commercial Southern Highlands

Raine & Horne Commercial Southern Highlands is rapidly building market momentum just months after opening its doors.

The office was launched by Principal of Raine & Horne Southern Highlands, Matthew Anstee in September 2025. At the same time, Matthew recognised the strength and professionalism of Lisa’s approach to commercial real estate and appointed her as the Head of Raine & Horne Commercial Southern Highlands. According to Lisa, the business has already secured a significant share of commercial sales activity. In turn, this success is attracting copycat competitors.

“Another commercial brand has now opened an office, while a local independent has now launched a commercial arm.” Yet despite the new entrants, Raine & Horne Commercial Southern Highlands has already captured a sizeable share of the sales market while making its mark by selling more substantial commercial land developments.

“Just in sales, we’d probably be close to 40% market share,” Lisa said. “But what sets us apart is that we are winning the big listings, and this pushes us over the edge versus some of the others. They have smaller listings, but we seem to be getting the more sizeable industrial development sites from $3 million to $5 million, which is amazing.”

The team is also expanding its property management footprint. “While we’re selling, we’re also gaining managements through the buyers,” Lisa said. “We’ve grown our rent roll by more than 50% since we started in September.”

For all your commercial property sales and leasing needs in the Southern Highlands, contact your local Raine & Horne Commercial Southern Highlands on

[i] https://www.rhcommercial.com.au/southernhighlands/properties/3-458-argyle-street-moss-vale-2577-new-south-wales-L34206570

[ii] https://www.rhcommercial.com.au/southernhighlands/properties/81a-main-street-mittagong-2575-new-south-wales