How Australia’s commercial design industry relates to the three pillars of supply, demand and sustainability

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Is there a relationship between the Australian property price boom, the commercial property sector, foreign investment and sustainability, and if so, how is this boom driving innovation in the commercial property market? today?

Unbeknownst to many, the commercial design and real estate sectors mirror each other more closely than perhaps many other industries.

Concretely, this means that the expansion of real estate construction reinforces the growing need for design services.

The two disparate disciplines are almost mirror images of each other in terms of how they shape each other’s fortunes.

Like many in the modern business world, this is an interconnected ecosystem culminating in cause and effect, where the effects of a strong real estate market provoke a backlash in the design industry.

In other words, in a booming real estate market, designers have more choices for the job, while at the same time a vibrant design industry is driving the growth of the real estate sector by attracting new investors to add more value. to otherwise common projects. -mill or old properties, which in turn creates the perfect incubator for even further growth.

And as with business design, commercial real estate growth is largely driven by third party investment.

At the end of 2017, CBRE reported that foreign investment now accounted for a third of commercial real estate transactions across the country, making Australia a prime destination for global cross-border capital.

It’s also not surprising that Asia has emerged as a key source of investment in Australia’s real estate sector, with the region accounting for around $ 2 billion of capital injection in 2017 alone.

As for the commercial real estate market, it is stronger and wider than ever, which also has other consequences, perhaps less favorable.

For example, as rents in high-end downtown locations increase and availability drops dramatically, occupants are looking for other locations beyond the CBD or surrounding areas. This factor, coupled with improved road and transport infrastructure, means that investing in real estate outside the central city is now an increasingly viable prospect.

But location is not the only aspect in which Australian commercial real estate is diversifying. Recent years have also seen a marked growth in properties that would otherwise be taken off the market through adaptive reuse and renovation.

This is particularly relevant in markets such as Sydney and Brisbane, where 40,000 m2 and 34,000 m2 respectively of commercial stock have been withdrawn in the last 12 months.

While this is not necessarily a huge influence on growth – scarcity, after all, has an effect on demand – meaning the real estate industry must be prepared to face the increased level of competition. that inventory reduction ultimately results.

Environmental certification and sustainability credentials are also increasingly important considerations for occupants choosing offices and other commercial spaces.

In Australia there are currently over 100 offices with a green rating of 6 stars or more, a number that is increasing year on year, which means to stay competitive and attract high quality tenants and hopefully Over the long term, real estate professionals need to continue to take advantage of – and invest in – green and sustainable design options.

The Australian commercial design market is booming. Now is the time to move on. For more vital information you need to help you think creatively about property and get ahead of the game, sign up for FRONT today.

Coming to Sydney’s Carriageworks August 9-10, the grand opening FRONT event explores all of these factors and more. Hear from the best and brightest in the business as they take a closer look at what drives the formidable real estate market – and how best to keep it going.


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