News magazine commentator, Angelo Castelda's analysis of the Lowy Institute Poll shows a remarkable resilience between Australia and the United States’ level of support and alliance. At the present time, 72% of Australians have considered this alliance as either “very” or “fairly” essential for Australia’s growth and security. Today, the Australian-US alliance is viewed and considered as steadfast that even amidst the divisive ruling of President Donald Trump, the said alliance remains to receive unwavering support.
A growing US economy is important to the world’s financial performance, including our local economy. Australia boasts of its strong job growth as unemployment remains at a low rate of five percent, resulting in a series of benefits and advantages for the country's commercial real estate sector. Demands from commercial tenants consistently support the commercial real estate market while demands from investors also remain comparably strong. This only means that both ends contribute to keeping Australia's commercial real estate market as one of the fastest-developing and booming industries today.
With the Australian-US alliance strengthening over the years, and demands from both tenants and investors remaining as stabilized, how can this then affect today’s commercial real estate industry in Australia? Curious? Read on. Here’s how:
Shifting in Retail Landscape more advanced in US
If you think the commercial real estate industry is the most predictable type of business out in the market, then you haven’t seen nor experienced much of it yet, in particular the commercial property caused recession of the early 1990s. Surprisingly, real estate is one of the most unpredictable types of businesses as tenants and investors demand continually shift one way or the other. Although Australia shows statistics about its stabilized real estate sector, there are still possibilities of several shiftings in the retail landscape.
This is all because of the increasing demands and trends in online shopping. Instead of putting up retail centers, most consumers opt for online shopping as it is more convenient than actual retail shopping. However, this also brings good things to the commercial real estate industry. Instead of putting up retail centers, more warehouse spaces for clothes, accessories, and things alike are established to serve as storage spaces or facilities for goods and materials.
The Rise of Build-to-Suit Projects in US
Build-to-suit and build-to-rent facilities are the second largest real estate investments in the US today. However, it’s not so much a trend in Australia. But since there’s an increase or growth in the commercial real estate industry, it has become a sector that most investors, property owners, and developers are starting to consider.
Build-to-suit and build-to-rent projects refer to spaces or facilities to house the specific needs and demands of a particular business or organization. Meaning, there would be less to no unused and unproductive areas as every corner of build-to-suit facilities will serve a significant purpose for companies. Today, build-to-suit facilities have become an emerging trend in the world. In fact, some warehouse for sale in Kansas City are build-to-suit projects!
Increased Takeover Activity in US coming to Australia
With all the rising demands and facilities just around the corner, takeover activities also continue to ramp up. This only means that more investors and other private sectors are expected to take over the industry and offer great deals for those businesses planning to establish commercial real estate facilities. This year, takeover activity is likely to increase as driven by US global players keen to build portfolios in Australia.