August is the time when publicly listed companies lodge and boast about their wins over the previous financial year. In 2026, the major property groups painted an interesting picture for commercial property.
Here’s an overview of the themes from the major players.
The curious case of Bathla Group, private credit and commercial contagion
Beleaguered residential property developer Bathla Group fell into administration on Tuesday, its main corporate entity Universal Property Group holding around $3.2 billion in liabilities, which didn’t include the deposits home buyers had paid.
It reportedly has more than 2,000 homes currently under construction with 13,000 in the pipeline.
Administrators will decide on the carve-up over the coming weeks, though they have reportedly sought a further $20 million to keep projects going and deliver homes to buyers.
Bathla has 2,000 homes primarily in Sydney’s west under construction, with many more in the pipeline. Picture: Bathla Group
The developer primarily focused on lower-cost homes in Sydney’s west, with its managing director Bhart Bhushan blaming the collapse on rising interest rates, a softening market, changing tax conditions, and rising construction costs.
However, it’s looking more like a simple case of over-leverage, according to John-Pierre Gortan, managing director of Simplicity Loans and Advisory, who has familiarity with the Bathla business.
“He’s (Bhushan) always kind of scrambled and made his way through it – a lot of these properties are actually quite good… but there’s only so much quality you can deliver for 600 grand,” the commercial finance broker said.
“Bathla have pretty much always run their stuff on private credit – very high interest rates and lots of different kinds of non-banks.
“He’s created such a large machine and you need to keep feeding it – he just didn’t have the sales anymore.”
Simplicity’s Jean-Pierre Gortan. Picture: Supplied
Many of those billions were owed to private credit funds, with monthly interest payments soaring into the tens of millions. Private credit has been the talk of the town among regulators over the past 12 months.
Both ASIC and the RBA have flagged private credit as a ballooning sector with more significant risks and lack of transparency compared to mainstream lenders.
On Thursday, Centuria Capital Group’s results showed its fund, Centuria Bass Credit, had $278 million tied up – or 24% exposure – with Bathla across six assets.
Earlier in the month, Centuria Bass froze redemptions for investors over concerns related to Bathla Group.
CVS Lane, another private credit provider with exposure to Bathla, also reportedly froze redemptions late this week.
Major private credit provider MA Financial did similar earlier in the year, though it isn’t exposed to Bathla.
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Similar withdrawal-limiting behaviour was seen in the United States across funds such as Blackstone, Blue Owl Capital and Apollo, with JP Morgan Chase chief executive Jamie Dimon likening it to stamping out cockroaches.
Mr Gortan said investors, jumping ship from stocks and bank accounts, may not be used to these types of products that largely fall in a grey area outside the remit of regulators.
“It’s put a question mark on these types of investments and lending,” he said. “People are clearly just panicking.”
Back home on the commercial patch, publican Jon Adgemis was also embroiled in a private credit fiasco before declaring bankruptcy, borrowing much of his $1.8 billion from private lenders.
He reportedly offered creditors 0.15c (a tenth-and-a-half of one cent) in the dollar to settle the matter, amid a $500 million sell-off of his pubs under the Public Hospitality Group umbrella.
However, Mr Gortan said the Adgemis case was almost a directly opposite issue to Bathla’s – frothy valuations, not over-leverage.
“This (Adgemis) was a function of dumb capital flooding the market looking for deals – robust lenders with strong prudent credit policies wouldn’t have done this,” he said.
“(Bathla) isn’t Adgemis; these are cheaply built and cheaply priced products made for a mass entry level market, which appealed to investors and first-home buyers – unfortunately for Bathla, no one is buying at all.”
Jon Adgemis at Oxford House in Paddington. Picture: NCA NewsWire / David Swift
In terms of contagion risks, Mr Gortan says it’s unlikely.
“At the end of the day, everyone will make their way out. I think it’s a bit of a scare… people are spooked,” he said.
“These (loans) have hard assets behind them, so at the end of the day, most of it, if not all of it, interest and everything will all get recouped.
“I think the only risk is a run on investments – for the assets there’s no wholesale devaluation… it’s not that the projects aren’t feasible.”
Office’s marked recovery, though selective tenancy prevails
Many major property groups agree in their reports that the office market is stabilising after a tumultuous post-Covid period, though the recovery looks K-shaped.
Dexus’ construction of the controversial Atlassian office tower in Sydney is on-track for completion in late 2026 with 100% of space pre-leased on a 15-year lease with fixed rent increases of 4% p.a.
An artist’s impressions of artwork on Atlassian Central, yet to be installed. Picture: Supplied
Things are looking a little less rosy up north, however, with its Waterfront Brisbane project delayed another year to late 2029, having to shoulder higher costs as a result. That said, pre-leases rose to 71%.
Dexus is also hedging its bets having sold off its 50% stake in the premium-grade 480 Queen Street office tower for $700 million, the river city’s largest office transaction for the year.
The flight to quality phenomenon in the office space is a well-documented theme so far in 2026, and data from Mirvac’s results illustrates it further.
Vacancy rates on Sydney CBD offices, provided by JLL, are more than double in buildings older than 15 years. Mirvac’s office portfolio age sits at 8.5 years with an average vacancy rate of about 4%.
Absorption is driven primarily by premium-grade developments.
Mirvac’s results show businesses increasingly prefer new and premium office buildings.
Selective leasing has also been seen in the bifurcated Melbourne, with lower demand in the St Kilda Road precinct offset by a concentration of demand in high-quality pockets of the CBD core.
Dexus results also show Sydney and Melbourne office supply will dry up over the next few years.
Dexus’ results show its supply pipeline is drying up over the next few years.
“Performance remains hyper local, with the gap particularly evident between premium core CBD assets and the rest of the market,” its office outlook read.
While businesses like shiny buildings, the perks within them may not be enough to get people to return to the office.
Recent research from comparison site Finder shows just 33% of people believe trendy features such as basketball courts, bars or pet days would be enough to bring them back in the office.
Data centres a phrase-of-the-year contender
Data centres were the hot-button issue among many companies’ results.
Construction company FDC, in its first results as a public company, showed data centres grew from 6% to 13% of its works over the 2026 financial year.
One of Goodman’s data centre developments in Sydney as of July 2026. Picture: Goodman
Goodman’s results, too, were bullish on data centres. It presides over total capacity of 6.4 gigawatts of data power.
Its work-in-progress development pipeline jumped to $19.7 billion, up 53%; data centres accounted for 78% of that.
It recently signed a long-term lease to an unnamed Tokyo-based hyperscale company.
Thirty per cent of its data centres portfolio is situated in Japan, providing 1.3 gigawatts, though only 10% of its work-in-progress is situated there.
Dexus has completed nearly 154,000sqm of data centres with a further 54,300sqm in the pipeline.
More than two thirds (68%) of the pipeline is has pre-leases in place, with fixed annual increases of 3 to 3.5%.
Dexus results show we reached ‘peak data centre’ in 2026.
That said, like for offices, supply is expected to dry up over the next few years.
While the business case for data centre construction is strong, economists say the long-term challenges will be whether Australia can capture compute output and have it meaningfully contribute to the economy.