Corenet Global Releases an Update on the Business and Economic Forces Impacting Australia's Corporate Real Estate Sector Ahead of Its Sydney Summit Planned for June 29 - July 1, 2008
SYDNEY, Australia, June 4 /Xinhua-PRNewswire/ -- As part of the run up to its Sydney Summit at the end of June, CoreNet Global, in partnership with title sponsor Colliers International, jointly released today an outlook on the driving forces and business trends currently transforming the corporate real estate (CRE) industry and profession in Australia.
According to the group's combined research, a vast array of business and economic forces -- including competition for a reduced labour pool, worker-centric location decisions and the sustainability wave -- are reshaping Australia's commercial real estate sector, whilst the days of the corporate real estate 'order-taker' are largely over.
With corporate real estate issues becoming increasingly integral to the mission of Australian organisations, the group reports that a number of business drivers are catapulting CRE executives from tacticians into more strategic roles for their corporations. As a result, the field of corporate real estate is undergoing significant change, driven by the following factors:
-- The competition for talent as the baby boomers enter retirement and
fewer Generation Y replace them;
-- The mix of multiple generations in the Australian workplace;
-- The changing nature of work itself, influenced by an increasingly
mobile workforce itself enabled by new technology;
-- The ongoing expansion and integration of the global economy including
mergers and acquisitions to enter emerging markets;
-- The monetization of real estate assets and the globalization of real
estate investment funds, equities and trusts;
-- The persistent advancement of technology;
-- The velocity, impact and awareness associated with energy costs and
carbon reduction, as well as the brand stigma for wasting energy
resources;
-- and the global integration of HR, IT and corporate real estate.
In considering the impact of the above issues upon the market, CoreNet Global's Region Director Australia/New Zealand, Peter Chenoweth, commented that a number of these factors are no longer operating independently, but are now impacting each other.
"The probability of significant, rapid change is therefore high," states Mr. Chenoweth. "Further, if one of these factors were to be singled out as the principal driver of this change, it would be climate change and the requirement for Australia to meet its 2020 sustainability objectives, and the role the built environment will play in helping to achieve these targets."
As a voice for large commercial and government occupiers, Mr. Chenoweth states that CoreNet Global is establishing partnerships with industry groups including the Property Council of Australia, the Green Building Council of Australia, the Facility Managers Association of Australia, and the Australian Human Resources Institute to ensure these targets are achieved.
In terms of market dynamics, Peter Evans, National Director - Corporate Services for Colliers International said the company's analysis of the working population data from the recent Australian Government Census release determined that a series of economic, population and town planning trends are also influencing the shape of the country's CRE sector.
Mr. Evans notes that service providers should pay attention to changing demographic trends across Australia. "The commodity states of Western Australia and Queensland are booming; non-commodity states are lagging; and Victoria is performing significantly better than New South Wales. CRE professionals therefore need to get their heads around these trends and determine how it will affect their future strategies and decisions."
Colliers International's research cites that city employment has grown significantly over the last ten years by 13% for Sydney, 21% for Melbourne and 31% for Brisbane, with:
-- Sydney enjoying the highest share of the financial and professional
services industries;
-- Melbourne housing the highest proportion of the manufacturing and
retail trade;
-- and Brisbane recording the highest share of the health and logistics
markets.
Mr. Evans says the strong growth of Australia's economy over the past decade has driven increasing company profits and growth in the white collar workforce, which has created escalating demand for office space in all Central Business Districts (CBDs) including Sydney.
With regards to Sydney itself, the group reports that absorption over the last three years has averaged 130,000sqm annually which has led to a reduction in the office vacancy rate to 3.7%, and that Sydney's CBD rentals have remained reasonably stable throughout the early 2000s although in 2007 an increase of 16% in gross rentals was recorded.
As limited supply is expected until 2010, coupled by continuing strong demand, Mr. Evans expresses that CBD rentals in Sydney are forecast to increase in the order of 7-10% per annum over the next two years.
Furthermore, hot spots to watch around the city include the Northwest and Southwest Growth Centres, and the "Western Sydney Employment Hub' at the intersection of the M4/M7 motorways, areas in which the Government is presently rezoning.
"The growth of "employment hubs" in metropolitan areas, combined with an increasing squeeze on CBD markets and escalating rentals are creating a very strong business case for more companies to seriously consider relocating to non-CBD markets," said Mr. Evans.
"Not only does this provide cheaper rents and access to a growing workforce, but these markets are also becoming increasingly attractive due to the availability of larger floorplates, access to natural light and increasing sustainability measures," he said.
CONTACT:
Peter Chenoweth
CoreNet Global
Tel: +61-3-9646-9703
Mobile: +61-414-932-830
Email: pchenoweth@corenetglobal.org
Janet Middlemiss
JEM Worldwide
Tel: +852-2857-3832
Mobile: +852-9195-7829
Email: janet@jemworldwide.com