Aussie commercial property executives like their chances

Australian corporate real-estate executives are the most optimistic in the world, according to a new report by Jones Lang LaSalle. 

Demand for corporate office space in Australia will remain strong over the next three years, sentiments expressed in the new global report suggest. 

Nearly half (48%) of Australian corporate real-estate executives are expecting their office portfolios to grow over the next three years, compared with the global average of 38%, the Jones Lang LaSalle Global Corporate Real Estate Survey 2011 has found. 

A quarter of executives expect their retail portfolios to grow over the next three years, compared with the global average of 20%. 

Only 16% of respondents in Australia expected to see a decline in their office portfolios over the next three years, compared with the global average of 34%.

The banking sector has the highest growth outlook among Asia Pacific nations. The report says 62% of respondents in the banking sector expect to see growth in their office portfolios during the next three years, and 48% expect their retail portfolios to expand over the same period. 

The report is sync with CBRE forecasts made in February that demand for Australian office space is continuing to recover in the wake of the Global Financial Crisis, with vacancy rates expected to continue their downward trend over 2011. 

According to the Property Council of Australia, the national office vacancy rate has dropped from 10% in July 2010 to 9.5% in January 2011. 

The Jones Lang LaSalle report also found that cost pressures will continue to be the single biggest driver of CRE strategy over the next three years. Australian and European respondents both placed cost pressure slightly ahead of growth as the most important influencer of real-estate strategy, whereas American and Asian respondents see growth as the driving force of their real estate strategies over the next three years.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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