Please Wait.....
Report
Commercial Real Estate Market In Australia - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)
Market Report I 2023-01-23 I 150 Pages I Mordor Intelligence
Key Highlights
The Australian commercial real estate market is expected to record a CAGR of more than 5.6% over the forecast period of 2022-2027. The Australian property sector experienced significant uncertainty and transformation in 2020. The COVID-19 pandemic saw employees choosing to work flexibly and increased consumer demand for e-commerce. This disrupted the market and created a number of opportunities for investors, landlords, and occupiers alike.
In 2022, it will be a new era for commercial real estate in Australia, with low interest rates, sustained government stimulus, and a population emerging from pandemic-induced lockdowns that are expected to increase their spending. The market outlook looks promising for commercial real estate investors, bolstered by cheap debt, structural changes, and the under-allocation of real assets.
Two major forces influencing Australia's commercial real estate market are urbanisation and population expansion. Further, the business has seen a number of trends recently, including improved accessibility, shared office spaces, and digital connectivity. In particular, with a hard climate for many areas on the horizon, more innovation in the sector will be necessary to maintain consistent growth. Even before the coronavirus epidemic struck the country, a fall in the value of commercial building activity in Australia was already expected.
Over the years, Melbourne and Sydney's prime office space has experienced high rents and little vacancy. While interest in flexible working spaces has fluctuated, investment in office real estate has remained consistent. This is partly because of the effects of the coronavirus epidemic. Typically, these coworking spaces are hired out on a temporary basis. Companies that don't want to commit to a lengthy lease for office space that might not be completely utilised may find this to be appealing.
Australia Commercial Real Estate Market Trends
Low Interest Rates in Commercial Real Estate Market
Record low rates and accommodative central bank policies are expected to last for the foreseeable future. While low rates are strongly supportive of capital-intensive assets like real estate, there are a few mechanisms underlying this. Low rates help investors get cheap money, lower the yield on cash and fixed-income investments, make real estate look more appealing, and keep business and consumer activity going.
Over the next two to three years, bond yields are likely to remain at the lower end of their long-term average, while commercial real estate can yield 4 to 5%. That 200-300 basis point spread over the risk-free rate offers a healthy risk premium.
The Reserve Bank of Australia kept the cash rate unchanged at a record low of 0.1% for the 15th month in a row during its March 2022 meeting. While mentioning that the war in Ukraine was a major new source of uncertainty, policymakers reiterated their unpredictability over how persistent the pick-up in Australia's inflation has been on the back of recent developments in global energy markets and ongoing supply-side problems.
Increase in Investments in Commercial sector
The value of commercial real estate transactions in Australia is on track to return to pre-COVID levels this calendar year, following a surge in logistics deals. Together with strong demand for other income-earning real estate asset classes, the strong recovery in 2021 was built on about USD 50 billion in the capital that was looking to ride the logistics boom.
Led by the record-breaking USD 3.8 billion acquisition of the Milestone logistics portfolio by ESR, industrial and logistics sales rose to USD 13 billion over the first nine months of the year, compared to the volume in 2020, which was USD 5.3 billion.
Although many malls are still struggling due to the rise of online sales and lockdown restrictions, retail investment activity has also rebounded. While Singapore, China, and Hong Kong drastically reduced their economic commitment to Australian real estate this year, the USA and Germany represented growth in investment this year, demonstrating the growing confidence that foreign buyers have in the local market.
According to Commercial Real Estate, the value of investment-grade industrial property in Australia will pass the value of office property for the first time in 2026. This is because logistics real estate values are going up and new, larger facilities are being built to accommodate the growth of e-commerce.
Australia Commercial Real Estate Market Competitor Analysis
The Australian commercial real estate market is strong and highly competitive. Indian commercial real estate is becoming a preferred destination for global institutional investors, driven by robust office space take-up, declining vacancy levels, and rising rentals. Small-scale developers are also merging with big real estate developers or exiting the market. Some of the country's major commercial real estate players include Lendlease Corporation, Scentre Group Limited, Mirvac, Pact Construction, and Multiplex Constructions Pty Ltd.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
1 INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Drivers
4.2 Restraints
4.3 Opportunities
4.4 Value Chain / Supply Chain Analysis
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
5 MARKET INSIGHTS
5.1 Current Economic Scenario and Consumer Sentiment
5.2 Commercial Real Estate Buying Trends - Socioeconomic and Demographic Insights
5.3 Government Initiatives and Regulatory Aspects for Commercial Real Estate Sector
5.4 Insights into Existing and Upcoming Projects
5.5 Insights into Interest Rate Regime for General Economy and Real Estate Lending
5.6 Insights into Rental Yields in the Commercial Real Estate Segment
5.7 Insights into Capital Market Penetration and REIT Presence in Commercial Real Estate
5.8 Insights into Public-Private Partnerships in Commercial Real Estate
5.9 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, Property Management)
5.10 Impact of COVID-19 on the Market
6 MARKET SEGMENTATION
6.1 By Type
6.1.1 Office
6.1.2 Retail
6.1.3 Industrial and Logistics
6.1.4 Multi-family
6.1.5 Hospitality
6.2 By City
6.2.1 Sydney
6.2.2 Melbourne
6.2.3 Brisbane
6.2.4 Adelaide
6.2.5 Canberra
6.2.6 Perth
7 COMPETITIVE LANDSCAPE
7.1 Overview (Market Concentration and Major Players)
7.2 Company Profiles
7.2.1 Lendlease Corporation
7.2.2 Scentre Group Limited
7.2.3 Mirvac
7.2.4 Pact Construction
7.2.5 Multiplex Constructions Pty Ltd
7.2.6 Meriton Apartments Pty Ltd
7.2.7 Stockland
7.2.8 Frasers Property
7.2.9 Pellicano Builders
7.2.10 Qube Property Group Pty Ltd*
7.3 Other Companies
8 FUTURE OF THE MARKET
9 APPENDIX
- Not Sure / Need Reassuring
- Confirm Content
-
Content is provided by our partners and every effort is made to make Market Report details as clear as possible. If you are not sure the exact content you require is included in this study you can Contact us to double check. To do this you can:
Use the ‘? ASK A QUESTION’ below the license / prices and to the right of this box. This will come directly to our team who will work on dealing with your request as soon as possible.
Write to directly on support@scotts-international.com with details. Please include as much information as possible including the name of report or link so our staff will be able to work on you request.
Telephone us directly on 0048 603 394 346 and an experienced member of team will be on hand to answer.
-
- Sample Pages
-
With the vast majority of our partners we can obtain Sample Pages to support your decision. This is something we can arrange without revealing your personal details.
It is important to note that we will not be able to provide you the exact data or statistics such as Market Size and Forecasts. Sample pages usually confirm the layout or the Categories included in Charts and Graphs, excluding specific data.
To ask for Sample Pages by contact us through ‘? ASK A QUESTION’, support@scotts-international.com, or by telephoning 0048 603 394 346.
-
- Check for Alternatives
-
Whilst we try to make our online platform as easy to use as possible there is always the possibility that a better alternative has not been found in your search.
To avoid this possibility Contact us through ‘? ASK A QUESTION’, support@scotts-international.com, or by telephoning 0048 603 394 346 and a Senior Team Member can review your requirements and send a list of possibilities with opinions and recommendations.
-
- Confirm Content
- Prices / Formats / Delivery
- Prices
-
All prices are set by our partners and should be exactly the same as those listed on their own websites. We work on a Revenue share basis ensuring that you never pay more than what is offered elsewhere.
Should you find the price cheaper on another platform we recommend you to Contact us as we should be able to match this price. You can Contact us though through ‘? ASK A QUESTION’, support@scotts-international.com, or by telephoning 0048 603 394 346.
-
- Discounts
-
As we work in close partnership with our Partners from time to time we can secure discounts and assist with negotiations, this is part of our personalised service to you.
Discounts can sometimes be arranged for speedily placed orders; multiple report purchases or Higher License purchases.
To check if a Discount is possible please Contact our experienced team through ‘? ASK A QUESTION’, support@scotts-international.com, or by telephoning 0048 603 394 346.
-
- Available Currencies
-
Most Market Reports on our platform are listed in USD or EURO based on the wishes of our Partners. To avoid currency fluctuations and potential price differentiations we do not offer the possibility to change the currency online.
Should you wish to pay in a different currency to that advertised online we do accept payments in USD, EURO, GBP and PLN. The price will be calculated based on the relevant exchange rate taken from our National Bank.
To pay in a different above currency to that advertised online please Contact our team and a quotation will be sent within a couple of hours with payment details.
-
- Licenses
-
License options vary from Partner to Partner as is usually based on the number of Users that will benefitting from the report. It is very important that License ordered is not breached as this could have potential negative consequences for you individually or your employer.
If you have questions or need confirmation about the specific license we recommend you to Contact us and a detailed explanation will be provided.
-
- Global Site License
-
The Global Site License is the most comprehensive license available. By selecting this license, the Market Report can be shared with other ‘Allowed Users’ and any other member of staff from the same organisation regardless of geographic location.
It is important to note that this may exclude Parent Companies or Subsidiaries.
If you have questions or need confirmation about the specific license we recommend you to Contact us and a detailed explanation will be provided.
-
- Formats
-
The most common format is PDF, however in certain circumstances data may be present in Excel format or Online, especially in the case of Database or Directories. In addition, for certain higher license options a CD may also be provided.
If you have questions or need clarification about the specific formats we recommend you to Contact us and a detailed explanation will be provided.
-
- Delivery
-
Delivery is fulfilled by our partners directly. Once an order has been placed we inform the partner by sharing the delivery email details given in the order process.
Delivery is usually made within 24 hours of an order being placed, however it may take longer should your order be placed prior to the weekend or if otherwise specified on the Market Report details page. Additionally, if details have been not fully completed in the Order process a delay in delivery is possible.
If a delay in delivery is expected you will be informed about it immediately.
-
- Shipping Charges
-
As most Market Reports are delivered in PDF format we almost never have to add additional Shipping Charges. If, however you are ordering a Higher License service or a specific delivery format (e.g. CD version) charges may apply.
If you are concerned about additional Shipping Charges we recommend you to Contact us to double check.
-
- Prices
- Ordering
- By Credit Card
-
We work in Partnership with PayU to ensure payments are made securely in a fast and effortless way. PayU is the e-payments division of Naspers.
Naspers operates in over 133 International Markets and ranks 3rd Globally in terms of the number of e-commerce customers served.
For more information on PayU please visit: https://www.payu.pl/en/about-us
-
- By Money Transfer
-
If you require an invoice prior to payment, this is possible. To ensure a speedy delivery of the Market Report we require all relevant company details and you agree to maximum payment terms of 30 days from receipt of order.
With our regular clients deliver of the Market Report can be made prior to receiving payment, however in some circumstances we may ask for payment to be received before arranging for the Market Report to be delivered.
-
- By Credit Card
- Security
- Website security
-
We have specifically partnered with leading International companies to protect your privacy by using different technologies and processes to ensure security.
Everything submitted to Scotts International is encrypted via SSL (Secure Socket Layer) and all personal information provided to Scotts International is stored on computer systems with limited access in controlled environments.
-
- Credit Card Security
-
We partner with PayU (https://www.payu.pl/en/about-us) to ensure all credit card payments are made securely in a fast and effortless way.
PayU offers 250+ various payment channels and eWallet services across 4 continents allowing buyers to pay electronically, whether on a computer or a mobile device.
-
- Website security