3 key commercial market trends in 2023
With the commercial real estate market predicted to enjoy continued growth in 2023, an industry leader called attention to key trends and factors that could set the sector’s tempo in the coming months.
Agency HQ chief executive Mark Morrison said the commercial real estate market is expected to remain strong throughout the year.
But in order to “stay ahead of the curve,” he called on investors and other players in the industry to keep an eye on three key trends.
The first major trend that he expects to shape the commercial real estate market is the continued shift towards online retail and e-commerce.
“With more consumers opting to shop online, demand for physical retail space is expected to decline, while demand for warehouse and fulfilment centre space is expected to increase,” he stated.
A recent report from data and analytics company GlobalData showed that the Australian e-commerce sector is forecast to record a growth of 13 per cent to reach $69 billion in 2022 as consumers increasingly shift from offline to online purchasing.
And this online shopping boom is not expected to end anytime soon. Further analysis showed that e-commerce sales in the country could rise at a compound annual growth rate of 10.5 per cent between 2022 and 2026 to reach $103.1 billion in 2026.
While this shift is already underway, Mr Morrison forecasts its acceleration in the coming years and encourages investors in the commercial real estate market to be mindful of these trends.
According to Mr Morrison, another trend to watch is the increasing importance of sustainability and energy efficiency in commercial real estate.
“As concerns about the environment and climate change continue to grow, more and more companies are looking for properties that are environmentally friendly and use resources efficiently,” he explained.
Mr Morrison explained that this trend is expected to drive demand for properties that have features like solar panels, green roofs, and energy-efficient systems.
In its Commercial Insights Q4 2022 Report, Raine & Horne revealed there is growing interest in money-saving “green” features among commercial investors, evidenced by increased enquiries about a prospective building’s environmental credentials.
Another trend Mr Morrison highlighted is the impact of technology on the sector.
“The proliferation of smart building technologies, such as Internet of Things (IoT) and building automation systems, is expected to drive demand for properties that are equipped with these technologies,” he stated.
The executive also noted that the expansion of remote work and flexible office space is expected to continue, which may result in changes in the way commercial real estate is used and developed.
Originally published by Real Estate Business
