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The Executive Centre Expects Brisbane Serviced Office Market to Grow by 15-20% - Buoyant demand driven by growing Chinese investment in Australia's mining sector

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According to The Executive Centre, Asia Pacific’s leading premium serviced office provider, the serviced office sector in Australia has well-developed into a distinct market segment and has experienced rapid growth in recent years, accounting for approximately 30% of the Asia Pacific’s business centres. The demand for serviced offices in Brisbane, in particular, has been on the rise, attributable to the growing Chinese investment in Australia's mining sector as well as the Chinese enterprises opting for business expansion in Queensland and the growth trend appears likely to continue into the future. Growing office space demand Fuelled by exports to emerging economies and mining-related investment by both the private and public sectors, the Australia’s improving economy has driven up the country’s overall business activity. In 2011, foreign direct investment (FDI) stock in Australia increased by 6.6% to a record AUD$507 billion and has grown by a compound annual rate of 8.5% since 20061. Chinese investment into Australia continues to grow with an annual average growth rate of 90% in the five years to 2011, demonstrating Chinese investors’ confidence in the strong Australian economy2. Queensland, followed after Western Australia, registered the second highest level of Chinese investment by transaction value accounting for 28.75% from September 2006 to June 2012, and 76% of Chinese investment was concentrated heavily on the mining industry (76%)3. On the back of rising optimism towards the country’s economic outlook, companies across various sectors have begun to roll-out expansion plans, and the establishment of new businesses from Chinese enterprises has also increased. Under the flourishing mining, steel and energy resources sector, and coupled with the strong market sentiments underpinned by low unemployment levels and population growth surpassing the national average, demand for prime Brisbane CBD office space is already booming. According to the latest market report released by Colliers International, office leasing activity in Brisbane remains at or above trend levels owing to the lack of prime office space. A total of over 1 million sq .ft. of prime office space is supplied throughout 2012 and approximately 78% of the total new supply has already been pre-committed. Vacancy rates are anticipated to fall to 4.3% by end of 2012 and further go down to 3.7% in 2013. Accordingly, the shortage of prime office space in Brisbane has continued to drive demand for serviced office space. Driving Forces behind Brisbane’s Serviced Office Market        Brisbane is now the Asia Pacific’s Top 8 serviced office market with 27 business centres4. In light of a limited amount of available land for development and the extensive use of high-rise buildings for both commercial and residential premises in Brisbane, serviced offices are ideally positioned for this environment where larger blocks of office space can be leased and divided into units that are more suitable for smaller businesses. Attributable to a lack of vacant office space, Brisbane’s serviced office market is well-positioned for substantial growth and serviced offices are becoming an increasingly popular solution – primarily for international companies seeking to establish a presence. Apart from the limited office space supply, the rise of the serviced office market during the last decade is seen to be fundamentally driven by the need for ever-greater flexibility and speed to market. Businesses are changing where and how they manage their operations on an increasingly regular basis, creating a need for not only flexible manpower but also flexibility in the capital infrastructure underpinning an organisation of which property forms a key element. New start-up companies as well as established organisations appreciate the benefits such as no capital investment and flexible lease terms featured in the flexible workplace solution. At The Executive Centre, office space and layout can be customised to suit the customer’s specific needs. Individual serviced office suites are sized from one to six workstations, and can be combined into larger workstation grouping of any size. Firms and entrepreneurs looking to have an immediate presence in Australia can benefit from its fully furnished, prestigiously located and well-equipped serviced offices in a professional business environment. Market Forecast 2013 It is anticipated that the Australia economy will remain healthy and the socio-political environment will remain calm over the short to medium term. Based on that, The Executive Centre expects more companies, both foreign and domestic, to look at expanding their business in Brisbane which would provide solid ground for further development in the office market, especially in the CBD area. As part of the office market development, serviced offices are also seen to grow along with the trend. Leveraging the steady global serviced office growth rate of 73% since 2005, and limited vacant office space in Queensland, the serviced office sector in Brisbane will continue its growth momentum in terms of workstations supply and will grow by 15-20% in 2013. Commenting on The Executive Centre’s business growth, Paul Salnikow said, “We anticipate a strong performance in our Australia business next year with revenue growth by 75%, as most industry sectors are in the stages of expansion benefited from the Australia’s growing economy and more new-business start-ups stimulate demand. The number of workstations across our Australia centres is forecast to increase by 60% next year.” “The Executive Centre shows no signs of slowing down. Since 2005, our business has grown by 261% compared to an industry average of 73%. Over the past three months, we have launched new premier office facilities in Singapore, Shenzhen, Shanghai, Chengdu, Mumbai, Sydney, Brisbane and Perth. Our expansion plans at prime CBD locations across the region are also ongoing. Leveraging the rising demand for premium serviced office space driven by companies seeking the advantages of flexible workspace solutions, we are confident of the growth at The Executive Centre in the coming years both in terms of capacity and revenue,” Paul Salnikow continued. Sources:                 #1 Australia Government – Australia Trade Commission May 2012 report     #2 Australia Government – Australia Trade Commission May 2012 report     #3: 2012 Report published by KPMG and University of Sydney #4: Instant Offices 2011 Global Serviced Office Review Report  
About The Executive Centre

The Executive Centre is the leading premium serviced office provider in Asia Pacific with over 80 centres in 21 cities. Founded in 1994, it operates in Hong Kong, Beijing, Chengdu, Shanghai, Tianjin, Shenzhen, Guangzhou, Macau, Taipei, Tokyo, Seoul, Singapore, Jakarta, Bangalore, Chennai,Pune, Mumbai, Gurgaon, Brisbane, Perth and Sydney. The Executive Centre provides serviced offices, virtual office representation services, meeting and conference facilities, and business concierge services to multinational corporations, small and medium enterprises, and start-ups locally, regionally and internationally. Please visit our Web site at www.executivecentre.com

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