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  • Writer's pictureTracie Harrington

Property Industry Weighs In On the 2022 Commercial Market

It has been a mixed year for a wide variety of property types across the diverse commercial property landscape in Australia, but where do things go from here?

The lockdowns and restrictions introduced by the federal government in 2020 caused an unprecedented level of economic disruption and resulted in once heavily populated CBDs turning into ghost towns.

Incentives for office leasing in the major CBD markets are now at or nearing their peaks, following the reopening of Sydney and Melbourne after significant citywide lockdowns in the second half of 2021.

Meanwhile, the breakneck industrial sector momentum shows no sign of slowing after stay-at-home shopping during the pandemic skyrocketed warehouse values with a little sign of a slowdown as major deals continue to flow.

Loosening Covid-19 restrictions helped retail sales bounce 10.1 per cent above pre-pandemic levels with customer traffic at shopping centres across the country now nearing where it was in 2019.

Shopping centres, student accommodation and hotels are now expected to benefit from high vaccination rates, increased mobility and the reopening of international borders.

Liquidity is returning to these sectors and a more diverse range of capital sources is expected to seek out counter-cyclical opportunities in 2022.

To learn more, The Urban Developer has turned to some of Australia’s leading property experts for their thoughts on the year ahead.


Andre Bali

Head of Development

Centuria Capital

“Centuria has been an early mover in emerging markets that are now coming to the fore, including industrial and healthcare.

“We believe demand for prime-grade assets in these sectors will continue in 2022, with current supply shortages driving development.

“Additionally, with a federal election on the horizon, it will be interesting to see how policymakers address two of the biggest challenges in the development sector—that is supply chain material constraints and skilled labour shortages. Easing of border restrictions will hopefully see more flexibility with skilled labour moving throughout the country.”

Andrew Ballantyne

Head of Research


“Covid-19 impacted real estate sectors will see improved investor sentiment, while the evolution of the digital economy and changing demographics support the real estate alternatives investment thesis.

“Healthcare-related assets are in strong demand for their exposure to a growth sector of the economy and low volatility of returns. We believe that all institutional investment will be viewed through an ESG lens.

“ESG factors are becoming more significant in the real estate sector as they quantify the sustainability of non-financial impacts of investments and are viewed to have a positive influence on long-term return and risk profiles.”

Luke Berry

Director – Sales Marketing

Thirdi Group

“The pandemic taught us a lot of things about consumer behaviour and that if you cover the key fundamentals they will be there to support you.

“Regardless if you are building an office tower, a residential development and/or a retirement resort, if the product is outstanding and ticks all the boxes—location, views, amenity, level of finish, technology—the market will support it.”

Sally Box

Managing Director

Cabot Properties

“Cabot Properties believes there are structural forces at play around the way consumers choose to live and access food and retail.

“The pandemic did not create these, only accelerate them and they are beneficial to the industrial sector as a whole.

“We predict we will start to see real rental growth coming through in Australian industrial markets, particularly in Melbourne and Sydney, this will eventually be in line with the growth we see in other global markets such as the US and UK.”

Matthew Burke

Regional Manager – Pacific


“Australia has been in the midst of a hotel development boom and 2022 will be the peak year of hotel openings with the highest increases in Melbourne—3900 rooms, Sydney—2250 rooms, and the Gold Coast—1300 rooms.

“CBD properties are expected to see a sustained recovery as the corporate travel and business meeting segment is pivotal to helping mid-week occupancies.

“We anticipate that there will continue to be high demand for regional destinations particularly in peak holiday times which will undoubtedly flow through to achieved rates, whilst the outlook for capital cities is less clear as operators balance more competition to evolving demand profiles.”

Chakyl Camal

Chief Executive

Panthera Group

“With change and uncertainty more prevalent in user behaviours, the year ahead will see businesses seeking more flexibility on their property commitments; especially from an office and workplace perspective.

“We are seeing continued strong growth in demand by investors in particular, for assets servicing everyday and experience-based needs such as food stuff, retail services, food and beverage and entertainment—especially in the liberated post-pandemic period.

“We have continued to monitor increases in local-based discretionary disposable income as people change their spending habits avoiding more risky international experiences.

“Overall, economic growth over the medium term is expected to be stronger than the years prior to the pandemic.”

Michelle Ciesielski

Head of Residential Research

Knight Frank

“Some may have felt the need to pause or delay their purchase over lockdown, but the intention is still there to ‘make the move’ to a low maintenance way of living.

“As travel is back on the agenda for many Australians, we will see a growing rise in demand for the branded residences concept and the premium willing to be paid to secure the lifestyle a hotel-led development delivers.

“Branded residences are considered a safe, high-yielding investment to lock-up-and-leave, with exceptional levels of serviceability. As this branded residence segment undergoes rapid growth and evolution, these factors will play a big part in shaping new developments in the coming years.”

Belinda Coates



“Pre-pandemic, Australia’s developers became increasingly interested in the opportunity to partner with major universities.

“Developers could see the opportunity to link commercial office, retail and residential with the benefit of campus foot traffic and the share of the international student wallet.

“Post-pandemic, universities are realising that significant benefits lie in the opportunity to raise revenue and create tangible value for the student community.”

Trudy Crooks

Managing Director

Resort Brokers

“I think we are going to see a huge amount of activity in 2022 as there is a lot of pent up momentum across the country. In particular, the ever-strengthening in interest regional assets is set to make for a very exciting year.

“Increasing capital will flow towards the regions, not only because of the relatively strong returns, but also because many Australians are discovering how amazing these locations are for the first time, and this can only lead to long-term stability in these regional areas.

“We will continue to see the tightening of capitalisation rates on freehold hotels, motels and caravan parks. This combined with low interest rates and increased domestic tourism makes for a very exciting year ahead.”

Jesse Curtis

Head of Industrial Real Estate

Centuria Industrial

“With industrial vacancy rates at an all-time low of 1.3 per cent nationwide, according to CBRE’s Q3 2021 research, we can expect to see more supply constraints within key infill urban locations and further yield compression along with strong rental growth.

“Quality tenant customers are paramount to delivering value in addition to strong tenant covenants such as long-term lease and triple-net leases.

“We expect to see a continuing shift to on-shoring supply chains to ensure continuity, especially within the manufacturing market. These extends to food manufacturing and packaging products.”

Michael Di Russo

Joint Head of Property

Clean Energy Finance Corporation

“The past year has shown that despite the challenges posed by ongoing Covid-19 disruption, optimism around fundamentals prevails. Investor and capital appetite for ESG will continue to grow as retrofitting properties while considering sustainability aspects accelerates along with being considered from inception for new developments.

“Reducing the embodied carbon in materials used in the delivery of projects by the construction sector will be more of a focus for builders and developers.

“The mid-market is another area that will see further growth as demand continues to expand for energy efficiency in the built environment as developers capitalise on the ongoing recovery, delivering market leading projects that raise the stakes for sustainable buildings across the country.

Stephen Gaitanos

Managing Director


“In 2022, Australia must be able to leverage its strong pandemic management position and economic credentials to be able drive recovery in our education and tourism sectors. Our assumption remains that recovery will begin in 2022 —assuming borders remain open—and begin to normalise back to 2019 levels in 2023.

“The key student recruitment and tourist markets of China and south-east Asia will rebound and we expect to see a significant volume of customers from these markets over the next 12-24 months.

“The higher ranked Australian universities will outperform their domestic peers and will lead the recovery in international student recruitment in our opinion. We also expect to see stronger demand from domestic students who have for the most part had to study online over the last 2 years, but are likely to be more and more mobile.”

Michael Gibson


PwC Australia

“There will be increasing demand on Universities to provide both a physical and digital campus experience for students and staff.

“Strategies to shrink, repurpose or consolidate campus facilities will continue to be implemented across the sector, with a renewed focus on reducing administrative space and repurposing underutilised spaces.

“Bringing industry on campus to provide work-integrated learning opportunities for students along with research collaborations is also likely to be a key priority going forward.”

David Hall

National Director – Industrial


“The continued uptake of technology platforms (e-commerce and on-line ordering etc) is now the interface between consumers and producers to facilitate their consumption requirements (both discretionary and non-discretionary).

“Producers will invest heavily in fortifying their supply chain and grow their ability to facilitate direct to customer via warehouse/distribution facility.

“Ultimately we will continue to see strong demand on industrial assets well into 2022.”

Matt Hemming


Mitchell Brandtman

“From a construction pricing and competition level, confidence needs to improve before we see a return of true competitive tender pricing as there would certainly be a case of ‘once bitten, twice shy’ so to speak, which is completely expected.

“A good six months of stability without noise of drastic price increases will assist in building confidence.

“Confidence will also come from working more collaboratively and openly, particularly when entering into longer term contracts. Any assumed risk will come with a hefty price tag in this new market so make sure you start with the right advice and on the front foot.”

Sass J-Baleh

Head of Industrial Research


“We expect that demand for industrial and logistics space will continue to be driven by e-commerce activity, as we forecast the e-commerce penetration rate to reach 20 per cent in the next four years.

“In addition to this, we have seen some significant upward movements in rents in the back end of 2021 and this is likely to continue into 2022.

“The pandemic and the acceleration of e-commerce has also led to the reassessment of inventory levels, and therefore rising inventory requirements in the short to medium term will result in greater demand for space.”

Oscar Ledlin


Ledlin Group

“We can’t know if 2022 will be the end of this pandemic and the year that we see a significant step towards a post-Covid normality. What we do know, is that while the underlying core drivers of human behaviour will eventually resurface, the demands of our clients have substantially changed.

“[As a company] we are enthusiastic about moving further into the suburban office space and meeting our clients’ increased expectations with a focus on enhanced amenity in our business parks.

“More public open spaces, extensive landscaping with outdoor workspaces, communal rooftop terraces and an overall more integrated business community within our industrial estates.”

Brooke Lloyd


Cox Architecture

“The pandemic has undoubtedly changed organisations' approach to commercial space.

“I think we will see new strategies emerging for leasing and tenanting buildings to cater for new attitudes towards co-working, collaboration, and community.

“I think the hub and spoke model for large organisations will become more prevalent and drive a degree of consolidation of CBD stock and a rebirth of the fringe and suburban workplace sector.”

John Musca

National Director – Pub Investment Sales


“There will be more of the same in 2022 as the sheer weight of both public and private capital for the asset class, and indeed across real estate sectors, continues to fund consolidation and board-room acquisition mandates.

“The big will get bigger, and we will see a new wave of alternate, enhanced or development uses emerge for smaller hotels as sites are optimised and the diminishing appetite of undercapitalised hands-on operators gives rise to ownership fatigue.

“Expect a number of new closed funds to arrive alongside JV group operators with roll-up strategies and expect continued yield compression for investment hotels as it continues to evolve as the retail asset class of choice, underwritten by valuable perpetual approvals, licences and businesses attracting more sophisticated tenancy covenants.”

Chris O’Keefe


Time & Place

“My early prediction is that office environments won’t retreat or become redundant, but there may be a need to increase floor space, making offices bigger to cater for more people to interact away from the home office.

“I think that changes will occur across all commercial sectors, including retail, office and industrial, as each model adapts to a more flexible and mobile society.

“I think it’s likely that we will see the push for decentralised working and distribution through existing assets such as office and retail centres, changing the way these buildings are used.”

David Oudshoorn

State Director

MaxCap Group

“The pandemic—hopefully in a milder form—is here to stay and our industry has proven that we can deal with that.

“The major risk relating to the pandemic in 2022 is the level of uncertainty around government decision making.

“The construction industry in particular needs international and domestic borders open with certainty to ensure free flow of labour and materials to minimise further cost escalation.”

Phil Pearce

Chief Executive

ESR Australia

“The adoption of e-commerce during the pandemic has underpinned a lasting change in consumer behaviours. As a result, the demand for quality warehousing and supply chain solutions will be sustained throughout 2022.

“Pandemic prompted shortages in the supply chain and human capital across all sectors will mean businesses will have to innovate to cater to existing and future demand.

“This could mean a sustained demand for warehousing for the industrial sector due to customers wanting to hold more significant quantities of inventory in the short to medium term, paired with the accelerated adoption of robotics and automation.”

John Sears

Head of Research

Cushman & Wakefield

“Trends that accelerated during the pandemic, such as online shopping and work from home, are expected to continue in 2022. These will either aid or offset the expected tail winds of forecast above-average GDP growth, and an equally strong labour market.

“Industrial sector strength is also likely to continue into 2022, with a wind-back of retail space in favour of warehousing expected to help industrial rents catch up to the surge in land values recorded in 2021.

“While work-from-home is likely here to stay to some degree, an attractive workplace will be key in helping to attract and retain staff in a competitive employment environment.”

Andrew Simons

Head of Industrial Development

Charter Hall

“[The pandemic] has accelerated the structural shift to automation. Rather than should a tenant customer automate, to how much automation can the business model support.

“Moving forward there is going to be a significant focus on providing ‘last mile’ solutions to allow our tenant customers to deliver their products directly to their customers’ homes or businesses.

“This will require significant change to permitted land uses, a need to rethink strategies around zoning, permitted uses, hours of operation and concepts such as multi-level, high density warehousing. This will become critical to allow our cities to function effectively in the future.”

Sarah Slattery

Managing Director


“Consulting firms who have a strong government and infrastructure pipeline are now back to pre-pandemic staffing levels and yet still require more staff. Some larger firms are starting to turn work away.

“Consultants are seeing more confidence from commercial and residential developers.

“Coupled with the already strong pipeline we are seeing from the government stimulus, 2022 is looking to have a high volume of work across the board. Works ramping up include airports, rail and road infrastructure, station precincts, industrial, logistics and storage, build-to-rent and retail mixed-use.”

Nick Sparks



“We expect to see that purpose-built student accommodation projects will restart and accelerate as the flow of international students recommences, possibly after an extension of the current pause while excess capacity is reabsorbed into the system.

“Public universities with large campuses, particularly on the urban fringe and in the regions, are already actively exploring ways to better utilise the land available to them through conventional capital works programs but also in partnerships with private and superannuation funds to develop multi-use and mixed commercial space on campus.

“As for urban campuses, we see that they will continue to expand upwards with more vertical projects replacing low-rise buildings, while bringing some real architectural merit to many of their projects.”

Vivek Subramanian

Managing Director

Sandhurst Retail & Logistics

“The pandemic hasn’t changed our focus, and if anything it has cemented our vision of delivering places to visit that offer more than just shopping.

“We aren’t expecting the logistics boom to go away any time soon, and we will continue pushing into that sector and growing our pipeline to deliver sustainable solutions to tenants.

“With so many new residents and houses coming to the regions, there is an opportunity to bring in industry-leading design to create landmark centres that people will be proud of, and that will feel like home for new communities.”

Adam Vaggelas


GreenFort Capital

“The pandemic has propelled a trend towards the integration of real estate uses and the promotion of flexibility in how we live and work.

“With a high relative vaccination rate, and international borders opening next year, we see the Australian real estate market strengthening further into 2022.

“We also expect to see a continual diversification of institutional portfolios towards the residential and alternative real estate sectors which have performed well over the past few years.”


Ted Tabet

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