A promising outlook for the commercial sector

‘After attending the Property Council Australia’s Office Market Report breakfast at the beginning of February, we walked away with a sense of good things to come in the commercial sector across Australia’ – Andrew Johnson, CEO at Intermain.

Looking at the commercial sector on a macro level, information from the event showed premium grade commercial stock had maintained a steady demand and performed well in occupancy levels over the last few years. However, Grade A-D commercial stock (approx. 80% of the entire market) had seen a massive hit in occupancy levels especially in Grade B stock. Not news to us all!

However, the promising news for landlords with low occupancies, is that less new premium commercial stock is coming into the market in the next few years with investment easing off due to inflation and construction costs, and therefore, as workers return to the office, the demand for office space can only be fulfilled by unoccupied Grade A-D spaces.

The big question is, are workers going to return to the office? The consensus at the breakfast was that CEOs and Business Owners are beginning to mandate minimum days in the office which will force the demand for office space to increase.

‘My prediction would be that landlords/investors will be looking to jump on this demand and refurbish their unoccupied office spaces to see them occupied first. Upgrading amenities such as EOT (End of Trip) facilities, bathrooms and lobby upgrades will be popular to enhance the tenant experience.’ Jason Sultana, Director at Intermain.