Commercial Real Estate - Australia & Oceania

The Commercial Real Estate market market in Australia & Oceania is forecasted to reach a value of US$1.91tn by 2024.
This projection indicates an annual growth rate (CAGR 2024-2029) of 2.50%, resulting in a market volume of US$2.16tn by 2029.
When compared globally, the United States is expected to generate the highest value in the Real Estate sector, estimated at US$25.3tn in 2024.
Australia's commercial real estate market is experiencing a surge in demand, driven by foreign investors seeking stable long-term returns.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Australia & Oceania is experiencing significant growth and development. Customer preferences in the region are shifting towards more flexible workspaces and mixed-use developments. This is driven by the changing nature of work and the increasing demand for collaborative and community-oriented spaces. Additionally, there is a growing interest in sustainable and environmentally-friendly buildings, as customers become more conscious of their ecological footprint. Trends in the market include the rise of coworking spaces and the increasing demand for retail spaces in prime locations. Coworking spaces provide flexible and affordable options for startups and freelancers, while also fostering a sense of community and collaboration. Retail spaces in prime locations are sought after by both local and international retailers, as they offer high visibility and foot traffic. Local special circumstances in Australia & Oceania include the scarcity of land in major cities, which drives up property prices and encourages developers to build upwards. This has led to the construction of high-rise office buildings and residential towers, as well as the redevelopment of older buildings to maximize their potential. Additionally, the region's proximity to Asia has attracted foreign investors, particularly from China, who see Australia & Oceania as a safe and attractive market for real estate investment. Underlying macroeconomic factors that contribute to the development of the Commercial Real Estate market in Australia & Oceania include population growth, urbanization, and economic stability. The region has a growing population, which creates a demand for housing, office space, and retail establishments. Urbanization is also driving the need for more infrastructure and commercial developments to support the growing cities. Furthermore, the region's stable economy and strong financial system provide a favorable environment for real estate investment. In conclusion, the Commercial Real Estate market in Australia & Oceania is evolving to meet the changing needs and preferences of customers. The rise of flexible workspaces, the demand for prime retail locations, and the focus on sustainability are shaping the market. The scarcity of land, foreign investment, population growth, urbanization, and economic stability are all factors contributing to the development of the market.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.