Commercial real estate sales in Australia are set to pass $20 billion for the third year in a row, despite a decrease on last year’s figures.

According to a recent report from the Commonwealth Bank, to the end of September $19.5 billion worth of commercial real estate priced above $5 million had already traded during the calendar year.

That figure is 8% below the sales seen in the same period last year, however it is well above the 10-year average of $15 billion and total sales are expected to be close to $25 billion by the end of the 2015 calendar year.

According to the Commonwealth Bank report, a combination of the recent construction boom coupled with the stability of commercial real estate is driving the strong period of sales.

“One reason for this overwhelming popularity is simply the amount of quality stock available for purchase, boosted by recent construction activity in all capital cities, with new tenants committed to long leases and the potential for depreciation benefits,” the report said.

“Its stable investment performance is likely to continue attracting investors in a period of volatility in other financial markets.”

While the report points to an increase in popularity for commercial real estate priced at $5 million or more, Angus Raine, chief executive of Raine & Horne Commercial, said properties valued under that mark are also seeing lots of interest.

“We're seeing plenty of activity in industrial and retail markets priced below $5 million, with assets priced between $1 million and $3 million very popular with yield hungry, self-managed super funds,” Raine said.

“Low cash rates are also helping the smart money find its way into commercial real estate, which is producing some good sales results for vendors.”

While Raine believes the current low interest rate environment is helping the popularity of commercial real estate, MMJ Real Estate director Chris Johnson believes other economic conditions are helping to turn investors to the sector.

“It’s no question that the [commercial real estate] market is hot right now,” Johnson told Your Investment Property last month.  

“In my opinion, it’s a combination of people seeing the higher yields available in commercial property as residential prices rise and also what’s happening on the stock market at the moment as well,” he said.