Australia Post has sold another major property in Sydney, marking the latest shift in its real estate portfolio. The depot at 25-27 Koonya Circuit, offered with vacant possession, is now under new ownership, though the buyer has not been publicly named. The move follows a broader trend of divestment by the postal service, which has been streamlining its operations amid financial pressures and changing logistics demands.

The sale comes as Australia Post continues to reduce its property footprint, focusing on core distribution needs rather than long-term asset holding. The Koonya Circuit site, located in Sydney’s southwest, was previously used for mail sorting and parcel handling before being vacated.

Separately, department store chain David Jones is slashing its retail presence after receivers were appointed to the company. The chain will close 19 stores across Australia and New Zealand, cutting its footprint nearly in half. The decision follows years of declining foot traffic and mounting debt, with the retailer now under the control of administrators working to restructure its operations.

Receivers have confirmed that the closures will proceed regardless of any potential sale process, though some locations may reopen under new ownership. The move affects both standalone stores and those within shopping centers, with staff at affected sites receiving redundancy packages.

While the David Jones restructuring dominates headlines, other commercial real estate transactions in Sydney highlight broader market activity. Developer FYVE has secured a 414-unit build-to-rent tower in the city’s south, with Seven Deutsche Asset Management leading the deal. The project reflects the growing demand for rental housing in Sydney, where vacancy rates remain tight despite economic uncertainty.

Brookfield Asset Management, meanwhile, has acquired a southwest Sydney distribution center previously developed by Goodman Group for Mainfreight. The facility, expanded over a decade, shows the shift toward consolidated logistics hubs near major transport corridors. The purchase aligns with Brookfield’s focus on industrial real estate, which has outperformed other sectors amid e-commerce growth.

Charter Hall’s 52,000-square-meter Chifley South office tower has reached its final structural phase, with the building now 60 percent pre-leased. The development, targeting corporate tenants, adds to Sydney’s office supply pipeline as demand from traditional occupiers remains subdued. Meanwhile, Borger Cranes has expanded its western Sydney operations by leasing a large industrial facility at Arndell Park, supporting heavy equipment logistics in the region.

Retail struggles as logistics and housing thrive

The transactions reflect Sydney’s dual reality: while retail and office sectors face headwinds, logistics and residential development remain resilient. The David Jones closures, in particular, signal deeper challenges for bricks-and-mortar retail, though the chain’s potential sale could inject new capital into its operations. For now, the focus remains on execution—whether the store reductions will stabilize finances or force further restructuring remains unclear.

In a separate but related shift, Mirvac is resetting its Sydney development pipeline, submitting plans for three build-to-rent towers near Bourke Street. The proposal, part of a broader pivot toward rental housing, comes as traditional homeownership becomes less accessible for younger buyers. The move aligns with government incentives for affordable housing, though delivery timelines remain uncertain.

The Hargreaves family has also exited a long-held asset, selling the Strawberry Hills Hotel after 32 years of ownership. The freehold transaction, completed by Jim Knox’s Knox Group, reflects a trend of family-owned pubs changing hands as operators seek scale. Knox Group, which has acquired multiple Sydney hotels in recent years, is positioning the property for potential redevelopment or repositioning.

Elsewhere, AsheMorgan is targeting a Sydney CBD office and retail investment for about $200 million, below the vendor’s original asking price. The deal, if completed, would add to the city’s office market, though absorption rates for Grade A space remain sluggish. Meanwhile, Silverstone Group has sold a residential development site in Sydney for $14.5 million, following approval for a 51-lot subdivision. The transaction highlights the continued demand for infill housing in established suburbs.

Charter Hall is also reviewing its stake in David Jones’ Sydney flagship store, the retailer’s oldest location. The decision comes as the department store’s future hangs in the balance, with administrators exploring options including sale, leaseback, or partial disposal. The flagship, a heritage-listed building, could attract interest from cultural or mixed-use developers if the retailer exits the site entirely.

Australia Post exits property ownership entirely

The 25-27 Koonya Circuit depot’s sale shows Australia Post’s broader shift away from property ownership, with the postal service now focusing on leasing logistics space rather than maintaining its own facilities. The move aligns with industry trends, where companies increasingly outsource storage and distribution to third-party operators.

Data Centres and Industrial Expansion

AirTrunk, a Sydney-based data centre operator, has secured $4.25 billion in green financing for its Western Sydney campus, a project that will expand its capacity to meet rising demand for cloud and AI infrastructure. The funding, one of the largest green loans in Australia, will support the construction of additional modules at the site, which is strategically located near major data highways and power grids. The deal follows a similar $1.5 billion data centre approval for Microsoft in Sydney, which will be powered by renewable energy and designed to support hyperscale computing needs.

Billion-dollar data centre boom reshapes Sydney’s technology sector

In a related move, CDC Data Centres has submitted plans for a $15 billion hyperscale campus across 103.8 hectares south of Sydney, near the M7 corridor. The project, which would include multiple data centre modules, aligns with the government’s push to decentralize critical infrastructure and reduce reliance on eastern seaboard facilities. The site’s proximity to transport links and energy sources makes it a prime location for large-scale digital operations, though regulatory approvals remain a hurdle.

On the industrial front, Pipeclay Lawson has acquired a west Sydney concrete plant for $18.3 million, leasing it back to the original operator, a construction chemicals manufacturer. The transaction reflects the resilience of industrial real estate, particularly in areas with strong construction activity. Meanwhile, Centennial and Direct Commercial Property have purchased a Northern Rivers industrial site for $22 million, with plans for an 18-lot subdivision to support regional logistics growth.

In another notable deal, Singapore-listed Wee Hur Holdings has secured an option to acquire a Sydney development site with mixed-use potential, including residential, office, and retail components. The transaction, valued at $10 million, reflects growing foreign investment in Sydney’s inner-city markets, where land values remain high despite economic uncertainties. The site’s unique configuration—combining industrial and office space—could attract developers seeking adaptive reuse opportunities.

Transport for NSW has also entered the market, selling a 1,467-square-meter industrial site adjacent to Sydney International Airport. The parcel, located at 2 Smith Street, is positioned for immediate redevelopment, with potential uses ranging from logistics hubs to light manufacturing. The sale follows a broader trend of government agencies divesting surplus land to private developers, freeing up capital for infrastructure projects.