DEXUS identifies office demand influences
DEXUS Property Group’s ‘Birds Take Flight’ report identifies key megatrends shaping office demand and how they’re creating both opportunities and threats for businesses over the long term.
Among the megatrends the report identifies as affecting office demand are: advances in mobile connectedness changing how companies interact with customers and one another; Australia’s ageing population causing a change in demand patterns; increasing corporate competition causing companies to focus on productivity, including the way they use office space; and growth in wealth management causing growth in financial services offerings.
The report uses the terms ‘eagles’ and ‘hawks’ to refer to industries that DEXUS says are likely to see rapid expansion in their need for office space in the coming years, and which are generally well placed to respond to change in the office market. Eagles are large and fast-growing sectors such as accounting services, scientific research services, tertiary education, health care and childcare services. Hawks are small but fast-growing sectors such as funds management services, the advertising and media agency sectors, mortgage brokers and superannuation funds.
Slow-growing sectors, on the other hand, are either growing more slowly than average or are being adversely impacted by the megatrends currently underway. The report says these sectors face having to adapt to compete, which means finding their niche or adopting better technology. It categorises these sectors as ‘swans’ (large and slow-growing) or ‘ducks’ (small and slow-growing).
The report puts national and regional commercial banking, and the general insurance sector, in the former category. Both are large sectors and use a lot of office space, but growth in both industries is expected to be slow.
In addition, the report gives print media and music publishing as examples of sectors likely to contract in the coming years as advances in technology affect reading and music production practices.