Good work: Industry revenue has grown strongly despite falling office property yields

The Office Property Operators industry has boomed over the past five years. Tenant demand has grown strongly, heightening property values. Increased investor activity, both domestic and from abroad, has further strengthened asset values. While large growth in supply is still some way off, foreign investors have played a large role in stabilising the industry's operating environment. Pension funds and sovereign wealth funds, and local superannuation funds also invest in office property due to the steady returns.Industry revenue is expected to grow at an annualised 10.3% over the five years through 2017-18, to $37.1 billion. This includes a projected decline of 3.0% in 2017-18...read more.

Industry Statistics & Market Size
Revenue
$37bn
Annual Growth 13-18
10.3%
Forecast Growth 18-23
Profit
Employment
72,498
Businesses
64,902
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Strong foreign investment helped operators expand their property portfolios, increasing earnings
  • Prime office locations in areas such as Sydney and Melbourne have displayed strong price growth
  • Competition will likely increase from temporary office leasing, as businesses become more mobile
  • Industry Report - Industry Key Buyers Chapter

    The Office Property Operators industry displays low market share concentration. The industry's four largest players account for less than 10% of industry revenue. While market share concentration is low overall, concentration varies between industry segments and by location. For example, large financial institutions and managed funds have a greater market share in prime office properties. Recently, some consolidation has occurred among listed property trusts. The most prominent example of this is DEXUS' April 2014 acquisition of the Commonwealth Property Office Fund.Buying opportunities continue to exist for larger firms, and many of the larger office property players are expected to continue expanding their portfolios. Whi...purchase to read more.

    Additional Insights for the Office Property Operators Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Office Property Operators Industry are

  • Financial structure of the company
  • Management of a high-quality assets portfolio
  • Ability to effectively communicate and negotiate
  • IBISWorld analysts also discuss how external factors such as Capital expenditure by the private sector and Cash rate in the Office Property Operators industry impact industry performance..

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    What's in this report

    What is the Office Property Operators Industry?

    Industry companies are primarily engaged in leasing or renting office property.

    Industry Products
  • Prime CBD offices
  • Prime suburban and regional offices
  • Secondary CBD offices
  • Secondary suburban and regional offices
  • Prime other major market offices
  • Secondary other major market offices
  • Industry Activities
  • Office space renting or leasing as owner or leaseholder
  • Office building renting or leasing as owner or leaseholder
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Capital expenditure by the private sector
  • Cash rate
  • Total number of non-manual employees in the workforce
  • Demand from superannuation funds

  • Current Performance
  • Commercial property boom
  • Foreign interest
  • Supply restrictions
  • Vacancy rates and profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Investment interest
  • Work environment changes
  • Table: Office Property Operators Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Office Property Operators Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Finance
  • Professional Services

  • Key Selling Industries
  • Air Conditioning and Heating Services
  • Commercial Cleaning Services
  • Electrical Services
  • General Insurance
  • Legal Services
  • Painting and Decorating Services
  • Plumbing Services
  • Real Estate Services

  • Products & Services
  • Secondary CBD offices
  • Prime CBD offices
  • Secondary suburban and regional offices
  • Prime suburban and regional offices
  • Secondary other major market offices
  • Prime other major market offices
  • Chart: Office Property Operators Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Governments
  • Finance and insurance firms
  • Property and other business service providers
  • Mining, utilities and industrial firms
  • IT and communications firms
  • Chart: Major Market Segmentation for the Office Property Operators Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Office Property Operators

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Office Property Operators Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Office Property Operators Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Office Property Operators Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Australian Real Estate Investment Trust (A-Reit)
  • A trust usually listed on the ASX, which holds a portfolio of real estate, allowing investors to buy units in the trust.
  • Capital Gain
  • A profit from a sale of real estate that exceeds its purchase price.
  • Depreciation
  • The fall in value of assets over their normal lifetime.
  • Occupancy Rate
  • The amount of office space occupied as a percentage of total available space.
  • Telecommuting
  • An employee who works from home, communicating with the traditional office via email, internet or phone.
  • Vacancy Rate
  • The amount of office space unoccupied as a percentage of total available space.
  • What Our Customers Say

    Why buy this report?

    The Office Property Operators market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Office Property Operators:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Office Property Operators market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Office Property Operators, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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