In 30 Seconds
Commercial property yield is a property’s yearly income as a percentage of its price. Gross yield, net yield, cap rate and an area’s asking rent-to-price ratio use different income, price or population bases. In September 2026 the asking rent-to-price ratio for industrial ranged from 3.70% in Greater Sydney to 5.43% in Greater Brisbane. This guide explains each measure, which comparisons are valid, and how to judge a good yield by comparing sector and region.
Commercial property yield is a property’s yearly income as a percentage of its price. A property bought for $1,000,000 that earns $60,000 a year has a 6% yield. But “yield” covers several different measures: gross or net, asking or achieved, one property or a whole area. Before you compare two yields, check which one each figure is.
This guide explains commercial property yield, the difference between gross yield, net yield and cap rate, and the two area measures in the Commercial Dex: the asking rent-to-price ratio and investment sale yield. Unless another source is named, market figures are from HtAG Analytics as at 30 September 2026.
Data as at 30 September 2026. Reviewed 7 October 2026.
An unlabelled yield is not a number you can compare. Gross or net, asking or achieved, one property or a whole area: the label decides what it means. (HtAG Analytics)
The yield family: which number is which
| Measure | Income | Price | Covers | What it is for |
|---|---|---|---|---|
| Gross yield | Rent before outgoings | Price of the property | One property | Quick screen of an individual listing |
| Net yield | Rent after the outgoings the owner pays | Price of the property | One property | What the property earns for its owner |
| Cap rate (capitalisation rate) | Net operating income | Market value | One property, or the market’s pricing of similar property | How the market prices income; used in valuation |
| Asking rent-to-price ratio | Typical advertised rent per m² | Typical asking price per m² | A council and property type, from separate properties | Comparing councils for research |
| Investment sale yield | Net income stated when tenanted investments were offered for sale | Their recorded sale prices | Recorded investment sales in a council | Evidence of what investors paid for income |
Source: HtAG Analytics.
Three rules follow from the table:
- An asking rent-to-price ratio cannot tell you a specific property’s net yield, investment sale yield or cap rate. Its rent and its price come from different properties, and nothing has been deducted for outgoings, incentives or vacancy. It can feed a scenario under your own assumptions, which is what the Commercial Dex brief does.
- Gross and net yields on the same property differ by the outgoings the owner pays, relative to the price. On a net lease the gap is small; on a gross lease it can be large.
- Australian yields are usually quoted on the purchase price before purchaser’s costs. Stamp duty and fees are not added to the price in the calculation, so the yield on your total outlay is lower than the quoted yield.
From rent to value: where each yield sits
A net yield or cap rate follows one property’s own income down a chain of deductions. The area ratio compares two separate markets.
The asking rent-to-price ratio and a net yield sit on different paths. The ratio is an area indicator; the net yield is a property calculation.
Worked example (HtAG Analytics, illustrative scenario): gross yield vs net yield on one property. A shop is for sale at $1,500,000 with a lease at $100,000 a year, both excluding GST. The owner pays $12,000 a year of outgoings that the lease does not recover from the tenant.
- Gross yield: $100,000 ÷ $1,500,000 = 6.7%
- Net yield: ($100,000 − $12,000) ÷ $1,500,000 = 5.9%
Calculations that add vacancy, finance and return assumptions are covered in our guide to commercial property investment analysis.
How the Commercial Dex measures yield
Asking rent-to-price ratio. The median advertised yearly rent per m² in a council, as a percentage of the median asking price per m², for the same property type, using separate advertised samples. It shows, in broad terms, how much rent a dollar of purchase price buys in that area before expenses. A higher ratio means more advertised rent for each advertised dollar of price.
Investment sale yield. For tenanted investment properties sold in the council, the yearly net income stated when they were offered for sale, as a percentage of the price they sold for.
How HtAG measures this. The ratio uses properties advertised on the reporting date: rents from lease adverts and prices from sale adverts, each on its own gross or net and GST terms, before outgoings and incentives. Investment sale yield uses recorded sales over a 12-month window ending four months before the reporting date (3 June 2025 to 2 June 2026 for this release), and carries a ± figure: the half-width of its median’s 95% confidence interval. Neither is graded as good or bad: a higher yield can mean better value or higher risk. The rent and price behind the ratio are explained in our guides to commercial rent per square metre and commercial property price per square metre.
Commercial property yield by sector
Industrial carries the lowest asking rent-to-price ratio in each of the four largest capitals: advertised industrial rents are a smaller share of advertised industrial prices than for office or retail.
HtAG Analytics: median advertised rent per m² ÷ median asking price per m², separate advertised samples on their own terms, before expenses, by property type, Greater Sydney, Melbourne, Brisbane and Perth, as at 30 September 2026. Greater Sydney industrial was the lowest at 3.70%; Greater Brisbane retail the highest at 8.91%.
| Greater capital | Industrial | Office | Retail |
|---|---|---|---|
| Sydney | 3.70% | 4.75% | 6.35% |
| Melbourne | 4.57% | 5.81% | 5.33% |
| Brisbane | 5.43% | 6.66% | 8.91% |
| Perth | 4.38% | 5.45% | 6.34% |
Source: HtAG Analytics Commercial Dex, asking rent-to-price ratio, as at 30 September 2026.
Commercial property yield by region
Outside the capitals, the ratio is usually higher. In most states, advertised rents are a larger share of advertised prices in regional markets than in the capital, but the pattern is not universal.
HtAG Analytics: asking rent-to-price ratio, industrial and office, Greater Sydney, Melbourne, Brisbane and Perth against the rest of each state, as at 30 September 2026. The ratio divides median advertised rent per m² by median asking price per m², from separate samples on their own gross/net and GST terms, before incentives and outgoings. Regional ratios are higher in seven of the eight comparisons; Queensland industrial is the exception.
The gap is widest for NSW office (4.75% in Greater Sydney, 7.20% in the rest of NSW) and Western Australian industrial (4.38% in Greater Perth, 6.88% in the rest of WA). In Queensland, the rest of the state’s industrial ratio (5.33%) sits slightly below Greater Brisbane’s (5.43%).
A higher regional ratio is not free money. When you see one, investigate the depth of buyers and tenants, how quickly property resells and the risk of re-leasing; the ratio alone does not tell you which applies.
Asking ratio vs investment sale yield
Where both are published, the two area measures differ, and not in a fixed direction.
HtAG Analytics: asking rent-to-price ratio (advertised, as at 30 September 2026) vs investment sale yield (stated net income ÷ recorded price, sales from 3 June 2025 to 2 June 2026), Greater capital city areas, by property type.
| Greater capital and type | Asking rent-to-price ratio | Investment sale yield |
|---|---|---|
| Melbourne industrial | 4.57% | 5.21% |
| Perth industrial | 4.38% | 5.08% |
| Brisbane industrial | 5.43% | 5.17% |
| Perth office | 5.45% | 6.42% |
| Brisbane office | 6.66% | 6.52% |
| Sydney retail | 6.35% | 5.07% |
| Brisbane retail | 8.91% | 6.05% |
Source: HtAG Analytics Commercial Dex, as at 30 September 2026.
The reasons are built into the measures. The ratio’s rent and price come from different properties advertised today, before expenses. Investment sale yield uses tenanted properties that actually sold, with their own stated net income, over the past year. Differences in property mix, timing, lease terms and income basis all feed the gap, and the figures do not separate one cause from another.
What is a good commercial property yield?
There is no single good number. A good yield is one that fairly pays you for the risk of that property type in that location, and you can judge that only by comparison:
- Compare within one property type. An industrial yield of 5% and a retail yield of 7% can be equally fair prices.
- Compare with the region. A council ratio well above its region’s ratio deserves a question: cheaper entry, weaker demand, older stock or a different mix of property sizes?
- Compare like with like on basis. Gross with gross, net with net, asking with asking.
- Compare with the cost of money. A yield is only attractive relative to borrowing costs and to what a risk-free investment pays.
Explore commercial markets on the free heatmap. The HtAG commercial property heatmap shows what is advertised for sale and for lease, and what has sold and leased, in every council, free. The indicative yield layer is added from the Starter plan.
Worked example: two pairs of councils
| Council, property type | Asking rent-to-price ratio |
|---|---|
| Kingston, industrial | 3.51% |
| Cardinia, industrial | 6.58% |
| City of Sydney, office | 4.95% |
| Melbourne City, office | 7.66% |
Source: HtAG Analytics Commercial Dex, as at 30 September 2026.
Cardinia’s industrial ratio is almost double Kingston’s. That does not make Cardinia the better buy. It tells a researcher to ask why: Cardinia sits on Melbourne’s outer south-east fringe, while Kingston is an established middle-ring industrial market in Melbourne’s south-east. The same logic applies to Melbourne City office at 7.66% against the City of Sydney at 4.95%. The ratio orders councils for research; it does not price a purchase.
The Commercial Dex List, office property in Greater Sydney, data to September 2026. The asking rent-to-price ratio (highlighted) shows each council’s own figure, or the region’s figure in grey where the council has none of its own.
Compare asking ratios and investment sale yields
The Commercial Dex shows the asking rent-to-price ratio for every council and property type, and investment sale yield on the council page where it is published, so you can see where advertised rents are high relative to prices and what investors have paid for income.
Compare asking ratios and investment sale yields · See plans
The asking rent-to-price ratio is included in the Commercial Dex from HtAG’s Starter plan. Investment sale yield is included from the Investor plan, on the council page, one council at a time.
Set your brief in the Commercial Dex and see which councils meet it, may fit, or fall outside it. From the Investor plan, the brief estimates a scenario net yield from each council’s ratio using your outgoings and vacancy assumptions, then applies your finance and return tests. Our guide to commercial property investment analysis explains every calculation.
How interest rates affect commercial yields
A cap rate can be broken into parts: a risk-free return (such as a government bond), plus a premium for the risk of the property, less the income growth investors expect. When interest rates rise, the risk-free part rises and investors usually want a higher yield, which means paying less for the same income. When rates fall, the reverse applies. As Thinktank’s head of research and chief financial officer put it in SMS Magazine, “If the 10-year bond rate increases, the cap rate would be expected to rise as well to maintain the risk premium.”
The effect is not immediate or mechanical. Australian research covering 2005 to 2018 found a positive relationship between bond rates and cap rates, with the estimated response varying by sub-market; other variables did not always move in the intuitive direction (Wong, Mintah, Baako and Wong, 2023). UK research shows cap rates also reflect investors’ expectations of future rental growth (Hendershott and MacGregor, 2005), and US evidence suggests much of the fall in cap rates before 2007, and their rise in the financial crisis, came from the economy-wide risk premium and credit growth rather than local rents and vacancy (Chervachidze and Wheaton, 2013). Valuations also lag: the Reserve Bank of Australia noted in 2023 that discount rates in commercial valuations “have not yet fully reflected higher interest rates” (RBA Bulletin, September 2023). For the current cash rate, see the Reserve Bank of Australia.
Common mistakes
- Treating the asking ratio as a cap rate. It is an area indicator from separate properties, before expenses.
- Comparing a gross yield with a net yield. The gap is the outgoings the owner pays, relative to the price.
- Chasing the highest number. A high yield often prices in a risk: vacancy, a weak tenant or a short lease. The reverse also holds. As Stuart Cartledge, Managing Director of Phoenix Portfolios, writes in Firstlinks, “Buildings with longer leases, higher fixed rent increases and better tenant quality tend to attract lower cap rates than the alternative.”
- Comparing across property types. Industrial and retail yields reflect different risks and growth expectations.
- Using residential yield logic. Our gross rental yield guide covers residential yield, which uses weekly rents and dwelling prices on a different basis.
Related commercial metrics
- Commercial rent per square metre: the rent side of the ratio, face vs effective and gross vs net.
- Commercial property price per square metre: the price side of the ratio.
- Vacant possession vs tenanted commercial property: why a lease changes a property’s value.
- Commercial property investment analysis: net yield, cash-on-cash and interest cover with your own numbers.
Research behind this guide
- Wong, W. W., Mintah, K., Baako, K. and Wong, P. Y. (2023). Capitalisation rates for commercial real estate investments: evidence from Australia. Journal of Property Investment & Finance, 41(2), 239-255. doi:10.1108/JPIF-09-2022-0063
- Hendershott, P. H. and MacGregor, B. D. (2005). Investor rationality: evidence from U.K. property capitalization rates. Real Estate Economics, 33(2), 299-322. doi:10.1111/j.1540-6229.2005.00120.x
- Chervachidze, S. and Wheaton, W. C. (2013). What determined the great cap rate compression of 2000-2007, and the dramatic reversal during the 2008-2009 financial crisis? Journal of Real Estate Finance and Economics, 46(2), 208-231. doi:10.1007/s11146-011-9334-z
- Lim, J., McCormick, M., Roche, S. and Smith, E. (2023). Financial stability risks from commercial real estate. RBA Bulletin, September 2023. rba.gov.au
Key takeaways
- Yield = yearly income ÷ price, but gross yield, net yield, cap rate and the area ratio are different measures.
- The asking rent-to-price ratio compares typical advertised rent with typical asking price from separate properties, before expenses. It ranks councils for research and cannot be converted into a cap rate.
- Industrial had the lowest ratio in each of the four largest capitals in September 2026, from 3.70% in Greater Sydney to 5.43% in Greater Brisbane.
- Regional ratios were higher in seven of eight capital vs rest-of-state comparisons for industrial and office.
- A good yield is comparative: within one property type, against the region, on the same basis, and against the cost of money.
FAQs
No. A cap rate is a property’s net operating income divided by its value. The asking rent-to-price ratio divides typical advertised rent by typical asking price, from different properties, before outgoings, incentives or vacancy.
Use the ratio to compare councils, and work out a cap rate or net yield from a specific property’s own lease and costs.
They measure different properties at different times. The ratio uses rents and prices advertised today; investment sale yield uses the stated net income and sale prices of tenanted investments recorded over the past year.
In September 2026 the ratio was higher than investment sale yield for Greater Sydney retail and lower for Greater Perth office.
Regional property often has a smaller pool of buyers and tenants and can take longer to resell or re-lease, and higher yields are how investors are paid for that risk. HtAG’s asking ratios were higher outside the capital in seven of eight comparisons in September 2026.
It is not universal. In September 2026 Greater Brisbane’s industrial ratio (5.43%) was slightly above the rest of Queensland’s (5.33%).
Higher interest rates raise the return investors can get without risk, so they usually want higher yields from property, which lowers what they pay for the same income. Lower rates work the other way.
Expected rent growth and competition for a property type can offset part of the effect, so yields do not move one-for-one with rates.
See the Data Behind Commercial Property Yields
The figures in this guide come from HtAG Analytics’ Commercial Dex, which compares commercial property by council and property type. Start with the free commercial property heatmap, look up any measure in the Data Dictionary, or see plans for full access.
Disclaimer: This article is general information for educational purposes only and does not constitute financial, legal or lending advice. Market figures describe council areas, not individual properties, and are derived from historical data and statistical modelling; they are not guarantees of future performance. Always conduct your own due diligence and consult qualified advisers before making investment decisions.
