AI uptake is set to shape the next phase of data centre growth in Australia, increasing the scale, infrastructure requirements and investment intensity, new CBRE research shows.

CBRE’s Australia Data Centres 2026 report identified AI accelerating demand, power availability, deliverable supply, differentiated asset quality, and selective capital as key themes that will define the next phase of growth for the asset class.

CBRE’s Head of Data Centres Research, Australia, Sass Jalili said while cloud adoption, digitalisation and hyperscale expansion continue to underpin Australia’s data centre expansion, increased AI-driven workloads have introduced a new layer of demand for the sector.

“What is changing is the scale, capital intensity and physical requirements of development,” Ms Jalili said.

“The next phase of growth will increasingly be determined by access to secured power, infrastructure readiness, experienced operators and creditworthy customers. As development requirements intensify, the ability to deliver operational capacity will become an increasingly important differentiator”.

The report notes electricity availability is beginning to broaden location consideration for data centres.

CBRE’s Pacific Director, Data Centres, Darcy Frawley said the optimal location for a data centre increasingly sits at the intersection of power and community support.

“Australia’s data centre footprint remains highly concentrated in Sydney and Melbourne. However, as new campuses require substantially more power and face increasing social licensing issues, strong consideration is being given to where the next frontier of development is.

“Growth opportunities are broadening geographically, with significant expansion planned in Perth, Brisbane and Darwin. In the past nine months we’ve also seen the emergence of regional locations, such as La Trobe Valley and Hunter Valley regions, where scalable power can be secured, sometimes with support from behind the meter generation,” Mr Frawley added (continues below).

The report shows data centres continue to attract significant institutional capital, with direct investment across Asia-Pacific reaching US$11.6 billion in 2025, reflecting the sector’s growing importance as a core infrastructure asset class.

In Australia, the investment opportunity is expected to expand considerably. CBRE’s October 2026 research forecast shows Australia’s investable data centre universe is expected to grow by approximately 90% to A$57 billion by 2030.

Australian data centre operators raised A$35 billion across debt and equity funding in 2026 to early September, up from A$24 billion in 2025.

Mr Frawley noted Australia is one of Asia Pacific’s leading data centre markets underpinned by substantial installed capacity base and strong future development pipeline.

“Capital expenditure by the world’s largest technology companies is accelerating sharply as hyperscalers invest in cloud and AI infrastructure,” he said.

“Australia is increasingly participating in this investment cycle. Major global technology companies are expanding domestic cloud, compute, and AI infrastructure reinforcing Sydney and Melbourne as strategic locations within their regional networks,” Mr Frawley added.

A copy of the report can be found following this link.

Australians estimate they waste $165 a month on purchases they consider unnecessary, with the cumulative cost potentially running to tens of thousands of dollars in mortgage interest.

A survey commissioned by insurer Youi found 93 per cent of respondents believed they wasted at least some money each month, while half estimated their unnecessary spending at $100 or more.

One in four estimated they wasted $200 or more a month.

Impulse online shopping was the most commonly cited money-wasting habit, nominated by 51pc of respondents.

It was followed by takeaway orders at 49pc and subscriptions that were rarely used at 48pc.

The survey of 1071 Australians found convenience was also a factor in discretionary spending, with 59pc reporting they spent money on convenience purchases at least monthly because they lacked time.

Uber eats savings

Analysis by Savvy, based on a 6.5pc interest rate and 25-year principal-and-interest loan, found an extra $165 a month could save $66,910 in interest on a $731,000 mortgage (as the average new owner-occupier loan size, based on Australian Bureau of Statistics data for the June quarter of 2026) and shorten the repayment period one year and 10 months.

Increasing the additional monthly payment to $200 would lift the estimated interest saving to $79,428 and cut the loan term by two years and three months.

Smaller contributions could also reduce borrowing costs (continues below).

An extra $50 a month on the same loan would save an estimated $21,796 in interest and bring the loan’s repayment date forward by seven months.

On a $400,000 mortgage, an additional $165 a month would save $61,844 in interest and shorten the loan term by three years and two months, under the same interest-rate and repayment assumptions.

The estimates assume the interest rate remains unchanged throughout the loan and that the borrower continues making the additional payments.

“Making non-essential or convenience purchases shouldn’t need to be cut out entirely for most Australians to make a difference on their home loan,” Savvy mortgage broker Daniel Carter said.

“With cost-of-living creep continuing to keep a tight grip on many Aussies’ finances, it’s important for many to treat themselves every once in a while,” he added.

“However, it’s still important to take stock of your spending habits and see where you can make life easier for your future self,” according to the executive.

“Cutting back on takeaway or online shopping by half, a third or even a quarter each month where you’re able to do so mightn’t be exactly what you want, but it could deliver savings to the tune of tens of thousands across the life of your mortgage”.

Borrowers can generally make additional repayments or use an offset account, where available, to reduce the interest charged on their home loan.

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Australia’s institutional living sector has emerged as the most sought-after real estate asset class among investors, ranking ahead of office, industrial and logistics assets as capital chases exposure to the nation’s chronic housing undersupply and resilient rental growth.

According to Cushman & Wakefield’s latest APAC Living Investor Survey 2026 Australia Spotlight, Australia and New Zealand ranked as the most preferred Living investment destination across the Asia-Pacific region, ahead of Japan, highlighting the growing appeal of living-sector investments ranging from build-to-rent and student accommodation to co-living and seniors housing.

Yet while investor demand is abundant, developers and investors continue to face a familiar challenge: finding viable opportunities to deploy capital.

The survey found more than half of diversified investors ranked living assets as their preferred Australian real estate sector, ahead of industrial and logistics, office, hotels and retail. At the same time, 76 per cent of investors are targeting multiple living subsectors, underlining growing conviction in the broader residential investment theme rather than any single niche.

For all the enthusiasm surrounding the sector, investors remain acutely aware of the obstacles confronting new development.

Feasibility concerns were identified as the biggest barrier to investment by 40 per cent of respondents, followed by planning approvals and complexity, cited by 28 per cent.

Tax settings and a shortage of investable stock were also highlighted as significant impediments (continues below).

“Investors are sending a clear signal that they want greater exposure to Australia’s living sectors, but enthusiasm alone doesn’t create investment opportunities,” said Josh Rose-Nokes, Director, Living Research, APAC at Cushman & Wakefield and author of the report.

“Demand for rental housing remains exceptionally strong and institutional capital is ready to deploy; however, feasibility constraints, planning delays and limited stock continue to restrict the market’s ability to meet that demand. The challenge now is creating more pathways to deliver investable product at scale.”

Sydney emerged as the standout destination among investors, attracting interest from every survey respondent despite having significantly less completed institutional living stock than Melbourne.

Brisbane also attracted strong interest, while Melbourne remained highly regarded despite already hosting a larger share of completed build-to-rent and purpose-built student accommodation supply.

For a copy of the report, contact Josh Rose-Nokes at josh.rosenokes@cushwake.com

Australia’s ageing population is creating a growing gap between the federal government’s commitments to fund healthcare and social services and its ability to provide the real estate to deliver those services.

That is creating a larger role for private capital in healthcare, aged care and childcare property, according to speakers at a CBRE event in Melbourne today.

“Governments will keep paying for the care…they can’t pay for all the buildings as well…that’s the gap private capital is being asked to fill,” CBRE Australian Healthcare & Social Infrastructure national director Sandro Peluso said.

But the expanding demand for healthcare and social infrastructure is not translating into a broad-based investment rush, with capital becoming increasingly selective about the assets and operators it backs.

“Capital is deep but it is highly selective…investors are looking beyond the lease to the quality of the operator, the underlying demographics and the long-term sustainability of the asset,” Mr Peluso added.

More than 500 investors, operators, government representatives, developers and property professionals attended CBRE’s The Impact of Healthcare and Social Infrastructure at Crown Palladium on Wednesday.

Demographics set the demand

The presentation coincided with the recent release of the federal government’s 2026 Intergenerational Report, which projects the number of Australians aged 85 and over will triple by 2065-66.

It also forecasts federal government health spending will rise from 4 per cent of GDP in 2025-26 to 6.2pc by 2065-66, while aged-care spending is projected to increase from 1.5pc to 2.3pc of GDP.

Business and finance commentator David Koch, who delivered the keynote address, said the demographic outlook provided an unusually clear view of future demand.

“Demographics are about as close to a sure thing as economics gets,” according to the broadcaster.

“We already know how many 85-year olds we’ll have in 2036 because they’re 75 today,” he added.

The Intergenerational Report projects Australia will have 39.3 million people by 2065-66, but with deaths expected to outnumber births from the 2060s as fertility declines.

Mr Koch said a challenge was whether the infrastructure and workforce would be available to service the ageing population.

“The only question is whether the beds, the carers and the money will be there when they need them,” he added.

Aged care needs a new home every three days

The scale of the aged-care requirement is already being reflected in government forecasts.

Mr Koch quoted Department of Health research that Australia needs to open a new aged-care facility every three days for the next 20 years, equivalent to about 10,500 additional beds a year.

For property investors, however, demographic demand does not automatically make every healthcare or social infrastructure asset investable.

“Capital is deep but it is highly selective,” Mr Peluso said.

“Investors are looking beyond the lease to the quality of the operator, the underlying demographics and the long-term sustainability of the asset,” he added (continues below).

The distinction was explored in a panel moderated by journalist Jacqui Felgate, featuring Victorian Health Building Authority chief executive Priscilla Radice, Barwon Investment Partners managing director Tom Patrick and Regis chief executive Georgia Willis.

Ms Radice outlined the Victorian government’s pipeline of hospital projects, including the recently completed Footscray Hospital and projects under construction or delivery elsewhere in the state.

Mr Patrick said there was scope for more private-sector partnerships involving smaller healthcare properties rather than concentrating investment around major hospitals.

He also pointed to difficulties in attracting medical practitioners to some locations, with doctors and specialists often wanting to work close to established employment and residential centres.

The availability of healthcare real estate therefore depends on more than the underlying population in a catchment.

CBRE Australian Healthcare & Social Infrastructure director Marcello Caspani-Muto said demographic demand was also uneven within individual markets, using childcare as an example.

He said some areas could have more childcare centres than others despite having less underlying demand, illustrating the importance of matching supply to local demographics rather than relying on broad population growth.

Aged care is not retirement living

The aged-care market presents a different property requirement, according to Ms Willis, who said facilities needed to be designed around how older Australians live and receive care, rather than simply providing accommodation.

Residential aged care and retirement living also serve different markets, with aged care designed around residents requiring higher levels of support while retirement living is generally aimed at more independent residents.

The distinction is becoming more important as government policy shifts more care into people’s homes while demand for residential aged care continues to rise.

Mr Peluso said investors were increasingly assessing healthcare and social infrastructure through both property and operating lenses.

“The strongest healthcare and social infrastructure assets are increasingly being assessed on both their property fundamentals and the sustainability of the underlying service and operator,” he added.

The investment requirement extends beyond aged care, according to the executive.

Australia’s healthcare and social assistance sector already employs about 2.4m people, or 16pc of the workforce, making it the country’s largest employing industry, according to the Intergenerational Report.

The report also forecasts health and aged-care demand to rise as Australians live longer, with ageing accounting for about one-third of the projected increase in health spending over the next 40 years

Mr Peluso said for property owners and investors, that leaves an expanding pool of government-supported service demand but a more selective market for the buildings that accommodate it.

The question is increasingly not simply whether an asset has a healthcare or social infrastructure tenant, but whether the operator, location, demographics and building remain viable over the life of the investment, he added.

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Sydney’s traditional divide between suburbs that stock the pantry and suburbs that dine out is moving west, with a new report that shows that consumer spending on eating out is growing fastest in many of western Sydney’s historically pantry-first communities. 

The new Retail Property Australia report, Spend Signals, using transaction data from CommBank iQ, builds a spend map of greater Sydney that captures geographic spend trends, the type of consumer driving them today, and where tomorrow’s momentum will come from. 

Food catering growth in Fairfield (+13.2 per cent), Auburn (+13.1 per cent), Canterbury (+13.1 per cent), Parramatta (+12.0 per cent) and Merrylands-Guildford (+12.0 per cent) is now outpacing many eastern and northern Sydney areas where dining out has traditionally led spending patterns, signalling changing spending habits across some of the city’s fastest-growing communities. 

Retail Property Australia Executive Director William Power said the findings reveal a broader shift in how Sydney consumers are spending and can inform how retail precincts best meet the needs of local communities. 

“The pantry line gives us a new lens on Sydney’s retail economy. Traditionally, we’ve seen a higher dining out spend concentrated in the inner city and eastern suburbs, but we’re seeing that behaviour spread into growth corridors across western Sydney. 

“As communities grow, attract new jobs and become more established, spending patterns evolve with them. The data shows that change is already underway.” 

The report finds Sydney’s highest spending markets remain concentrated in affluent eastern and northern suburbs, led by Eastern Suburbs-North ($2,293 per person per month), Manly ($2,199) and North Sydney-Mosman ($2,113). However, the strongest spending growth is occurring on the other side of the city in Canterbury (+9.4 per cent), Parramatta (+7.8 per cent) and Marrickville-Sydenham-Petersham (+7.7 per cent). 

The next wave of spending is also younger. While 30 to 49-year-olds remain Sydney’s biggest spenders, consumers under 30 are the fastest-growing spending cohort in 89 per cent of Sydney markets analysed, led by Canterbury, Leichhardt, Carlingford and Auburn (continues below). 

The findings come as consumers face ongoing cost of living pressures including the further tightening of monetary policy. 

NSW’s spend growth (+5.1%) is trending below the national rate (+5.3%). Sydney is doing proportionally more to carry that state number than Melbourne is for Victoria: Sydney sits 0.4 points above the NSW average (5.5% vs 5.1%), while Melbourne’s gap over Victoria is only 0.2 points (5.6% vs 5.4%).  

Across Australia, retail spending growth remains broad-based, led by Food Catering (+8.5 per cent), General Retail (+8.4 per cent), Jewellery, Watches and Luxury (+7.6 per cent), Retail Services (+6.4 per cent) Leisure (+6.1 per cent).  

“More budget conscious consumers and changing preferences will drive change in the spend map over time, influencing how physical retail spaces best cater to their needs,” William Power said. 

“Understanding which communities are growing, how younger consumers are spending and how retail habits are changing is important for retail investors and property owners planning for the future.” 

*All figures use CommBank iQ Transaction Data (Average monthly retail spend per capita, May–Jul 2026; YoY growth vs. May–Jul 2025) 

The expanding global luxury market is driving growth for the Australian and New Zealand luxury hotel sector with increasing demand, widening rate premiums and limited development pipeline fuelling investment across established assets.

CBRE’s Luxury Hotel Market report found luxury assets are outperforming the wider sector with demand across major Australian and New Zealand markets growing at a 2.9% CAGR since 2019, more than twice the broader hotel market’s 1.3%.

Occupancy across luxury hotels has remained stable at 78%–79% despite new supply. Since 2020, 20 hotels comprising 3,517 rooms have opened across Australia and New Zealand. In Australia, luxury represented approximately 33% of all rooms delivered during the period.

The analysis shows the median transaction price per key increased by 81%, from around $396,000 in 2011–2014 to $718,000 in 2023–2026 year to date.

This growth is attracting new global brands to the market and supporting expansion through conversions, repositioning, branded residences, and independent operating models.

The report shows since 2021, approximately A$3.2 billion in luxury hotel assets transacted across Australia and New Zealand. CBRE advised across approximately A$1.75 billion, representing 55% of total transaction value.

CBRE’s Head of Hotels, Capital Markets, Pacific, Michael Simpson noted international capital has been an important driver of investment.

“These transactions have established new benchmarks for absolute price, price per key and yield, attracting both domestic and international capital. Outcomes have been achieved across different market conditions, from transactions executed during pandemic lockdowns to major sales completed as investment activity recovered,” he said.

“China and Hong Kong investment was particularly active between 2012-2018. Singaporean and Malaysian capital has been steady with a more diversified buyer pool in recent years This depth of offshore interest has supported liquidity and helped establish new pricing benchmarks alongside active domestic capital,” Mr Simpson added (continues below).

CBRE’s Director, Hotel Research, Ally Gibson notes the report analysis shows luxury hotel performance is supporting the pricing outcomes across its transactions.

“Since 2019, luxury ADR increased across every market analysed and premiums over the all-scales sector are widening considerably,” Ms Gibson said.

“In Australia, the average luxury ADR premium over the all-scales sector increased by 53%, from $62 in 2019 to $94 in 2026. Queenstown’s premium rose from approximately NZ$78 to NZ$140, the highest of any market analysed, reflecting its position as a tightly supplied luxury leisure destination.

“Overall, ANZ’s luxury sector is broadening and upgrading. Sydney continues to deliver the strongest major gateway performance at scale and new product is establishing higher rate benchmarks,” she added.

Looking ahead, the report shows 11 ANZ luxury hotels comprising approximately 1,979 rooms are under construction, with most delivery expected in 2026 and 2027.

“Beyond the current development cycle, the confirmed pipeline thins materially as feasibility constraints limit new projects. Strengthening demand and limited new supply should support the performance and value of established luxury assets, particularly in markets with high barriers to entry,” Ms Gibson added.

For a copy of the report, contact: Ally Gibson at: ally.gibson@cbre.com.au.

Colliers office leasing specialist James McMahon shares how repositioning and activating existing CBD assets can improve leasing performance.

Melbourne’s CBD office market is seeing landlords take a more strategic approach to improving leasing performance, with targeted investment, stronger amenity and activation being used to reposition existing assets and make better use of infrastructure already in place.

Colliers Associate Director – Office Leasing, Melbourne CBD, James McMahon said the approach was becoming increasingly evident across leasing campaigns, with landlords looking beyond traditional refurbishment programs to identify where targeted changes could improve an asset’s appeal to occupiers.

Rather than treating existing buildings as requiring wholesale transformation, James said the opportunity was often to understand what an asset already offered, identify where it could be strengthened and build a leasing strategy around its existing attributes.

“Landlords are increasingly recognising the opportunity to breathe new life into existing fit-outs, refurbishing quality spaces to present as fresh, modern offerings while avoiding the cost of a full rebuild.

This approach creates a win-win, allowing landlords to deliver greater value to tenants through attractive rental incentives and abatements while providing occupiers with a high-quality workplace solution at a more competitive overall cost,” said James McMahon.

At 525 Flinders Street (pictured, top), James was involved in the repositioning and leasing of the building, which had previously experienced an extended period of vacancy before reaching full occupancy.

The new landlord took a proactive approach to repositioning the asset, introducing an on-site gym, activating the café offering and directly addressing previous security concerns.

These targeted improvements helped transform the tenant experience, reinvigorate the building and create positive leasing momentum.

James said the strategy worked because the building fundamentals were already strong, with excellent public transport connectivity, abundant natural light and access to green space.

Through hands-on building management, targeted investment and the ability to make quick decisions and adapt the leasing strategy, the landlord was able to capitalise on these inherent strengths, ultimately taking the building to 100 per cent occupancy.

At 360 Collins Street, James also secured a seven-year lease with engineering consultancy ACOR, attracting an occupier from Melbourne’s fringe to the CBD (continues below).

The transaction incorporated a tenant-led refurbishment of the existing fit-out, providing a more cost-efficient approach while allowing the occupier to align the workplace with its sustainability objectives.

Recent leasing activity has highlighted the success of targeted retrofit strategies, with 501 Swanston Street achieving 100 per cent occupancy after the landlord upgraded and modernised existing fit-outs across approximately 2339 sqm.

The approach created turnkey accommodation while avoiding the cost and disruption of a full refurbishment, with Peter MacCallum Cancer Centre and Peter MacCallum Foundation securing 942 sqm and 455 sqm respectively on five-year terms.

New Era Caps also leased 898 sqm at 525 Flinders Street for three years, highlighting continued demand for well-presented, value-driven office space.

James said the strongest leasing strategies were increasingly focused on understanding the needs of individual occupiers and matching those requirements with the strengths of each building.

“The most effective upgrades are not necessarily the most expensive, with occupiers increasingly prioritising value and efficiency when making real estate decisions.

Businesses are looking for workplaces that strike the right balance between quality, amenity and functionality while ensuring their occupancy costs represent genuine value.

It is about making sure the investment is aligned with what the market values and using the building’s existing strengths as a starting point.”

Looking ahead, James expects demand to remain strongest for well-located CBD buildings that can offer quality amenity, wellness features and a compelling workplace experience.

“The CBD continues to offer a level of amenity, connectivity and access to services that is difficult to replicate elsewhere.

As occupiers continue to refine their workplace strategies, buildings that can offer a strong overall experience will remain well positioned.”

Colliers flexible workspace specialist Barney Wilson on the changing role of flex and what’s next for the sector.

Flexible workspace is moving beyond conventional coworking stereotypes as businesses seek greater choice between traditional long-term leases and more flexible office solutions.

Colliers Senior Executive, Flexible Workspace | Office Leasing, Sydney CBD, Barney Wilson has worked across the flexible workspace sector in London since 2018, including on the operator, broker and agency side, before relocating to Sydney earlier this year and joining Colliers in April.

Mr Wilson said the biggest change he had seen was the shift in how businesses viewed flexible workspace before and after Covid.

“When I started in flexible workspace before the pandemic, a huge part of the initial conversation was in educating tenants as to why they should consider flexible workspace rather than a traditional lease. After COVID, things changed exponentially.

“The number one demand was flexibility. Businesses did not want to be tied down to a long lease because they simply had no idea what their headcount, growth or future requirements would look like and there was always the possibility of more lockdowns,” said Mr Wilson.

He said London had been at the forefront of the sector with Australia still developing its flexible workspace market.

“London has been at the epicentre of the flexible workspace revolution, becoming a launchpad for a mature, diverse and sophisticated market unrecognisable from that of 10 years ago…Sydney and Australia are still playing catch-up, but the potential is enormous.

“To a certain extent, there is still a perception in Australia that flexible workspace is for small companies, start-ups and solopreneurs. This couldn’t be further from the truth,” he said.

One of the biggest developments in the sector outside of Australia has been the rise of managed offices, which provide a middle ground between a traditional office lease and a serviced office.

“It is the perfect solution for those seeking the best of both worlds…you have a self-contained space but on flexible terms and with all-inclusive pricing,” said Mr Wilson.

Mr Wilson added that managed workspace was likely to become increasingly important in Australia as landlords and operators responded to occupiers seeking greater flexibility without compromising on privacy or workplace quality.

“We are seeing businesses looking for spaces for 20 to 100+ people with their own meeting rooms, exec offices, kitchen and breakout spaces, and they want to sign for 12 to 24 months,” he said.

Mr Wilson said the market did not always have products that met this combination of requirements, leaving some businesses to pursue traditional leases simply because a suitable flexible option was not available.

He said the gap was particularly evident for businesses looking for a genuinely self-contained workplace, rather than a small office within a larger coworking environment.

“The issue is that you might have a 30-person business that wants its own office, meeting rooms and facilities but there isn’t necessarily a flexible product that gives them all of that.

“Instead, they end up going through a traditional leasing process which can take months, when a flexible solution could be delivered within weeks,” he said (continues below).

He said the changing requirements presented an opportunity for traditional landlords to reconsider how existing office space could be utilised.

“The change is only going to be a positive thing for traditional landlords. It will force them to get with the times, think outside the box and use this empty space and utilise it better,” said Mr Wilson.

Mr Wilson said flexible workspace should increasingly be viewed as part of the broader office market, rather than a separate alternative to traditional leasing.

“Flexible office space is the future of office space. It is not necessarily about replacing traditional leases but giving occupiers more choice around how they take space and for how long,” he said.

That focus on choice is also influencing how flexible workspace operators design and position their spaces, with a greater emphasis on matching the product to specific occupier requirements.

“Operators are becoming much more targeted in how they design and position their space…the strongest outcomes happen when you understand both sides of the market, what the operator is built to support and what the occupier genuinely needs,” he said.

That focus is reflected in the speed of the market, with more than 50 per cent of enquiries progressing to a viewing within a week and the average time from first enquiry to signing around 10 working days.

“More than 50 per cent of our enquiries go out and view space within a week and the average time from first enquiry to someone signing is 10 working days,” said Mr Wilson.

Mr Wilson also expects flexible workspace to become increasingly specialised, with industry-specific locations emerging across sectors including health, technology and law.

He said the quality of the physical workplace remained important as occupiers became more discerning about what they wanted from flexible space.

“Community is important but it can’t make up for a poor-quality space. If the office is dark, small or simply not a good place to work, the community element loses its value,” said Mr Wilson.

Looking ahead, Mr Wilson expects the flexible workspace model to continue evolving, with dedicated flexible office buildings potentially becoming more common.

“At the moment, flexible workspace providers are limited to one or a few floors within a whole building,” said Mr Wilson.

“Soon there will be locations where every floor will be purely flexible offices of all sizes from 10 square metres to 1,000,” he added.

Mr Wilson said the evolution of flexible workspace would ultimately give occupiers greater choice while creating new opportunities for landlords to respond to changing demand.

Victoria’s proposed work-from-home laws have been thrown into fresh doubt after constitutional lawyers warned the scheme could be rendered inoperative if it becomes law.

Independent legal advice obtained by the Property Council of Australia has cast doubt on the Bill, finding it is likely to clash with the Commonwealth Fair Work Act and could therefore be rendered invalid under section 109 of the federal law.

Constitutional law specialists Nick Wood SC and Leigh Howard went further, concluding the problem goes to the heart of the scheme and that the entire regime would be inoperative if enacted.

The proposed regime would give eligible employees a right to work from home for up to two days a week, subject to employers refusing requests on reasonable business grounds.

The Bill has passed the Legislative Assembly and is before the Legislative Council.

The legal warning comes as replacement Ben Carroll pushes to have the law passed while delaying the proposed commencement until July 1, 2027 (continues below).

Property Council Victoria executive director Cath Evans has called on the government to release any legal advice it has received on the Bill, arguing businesses need certainty rather than a new regime that could end up before the High Court.

For Melbourne’s office market, the legislation has been closely watched because a statutory two-day work-from-home entitlement could affect occupiers’ workplace strategies and the amount and configuration of office space they require.

The PCA’s most recent Office Market Report, released last month, puts Melbourne’s CBD office vacancy rate at 18.9 per cent.

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Supply of Purpose-Built Student Accommodation (PBSA) could increase by one third on current volumes over the next few years if all planned projects proceed, new CBRE analysis shows.

CBRE’s Accommodating the Growth in Students report notes supply is forecast to increase by 34,000 beds across Australia from 2026-2029.

Melbourne accounts for 28 per cent of supply followed by Perth at (22pc) and Sydney (20pc).

While this is an uplift of one third on current supply, there remains a significant pool of unmet demand for PBSA in Australia with a shortfall of approximately 185,000 beds.

One in three Australian students international

Australia’s intake of international students is expected to be broadly flat over the five-year period from 2023-2027. 

Nearly one in three students in Australian universities is an international student. 

CBRE assess the penetration of PBSA is 7pc of students in Australia.

This is relatively low in a global context.  

The report notes since 2022 student accommodation rents have increased substantially, along with a recovery in international student numbers.

CBRE’s Head of Research Pacific, Sameer Chopra notes newer and highly amenitised stock, which students prefer, is providing a boost to average market rents (continues below).

“Student accommodation rents are currently at a 12% premium to rents for two-bedroom apartments in the same precinct,” Mr Chopra said.

“Today, nearly a quarter of PBSA standard suites have rents above $700/week,” she added.

“This used to be a phenomenon in Sydney and Melbourne but we’re seeing similar new stock with higher rents in Adelaide, Brisbane and Perth,” according to the executive.

“The premium rents are explainable as purpose-built student accommodation is usually furnished and offers utilities like electricity and wi-fi, breakfast and coffee facilities, community and social activities, safety and security like CCTV and card swipe access, as well as amenities including gym and study areas”.

Brisbane rent growth pacing high

CBRE assess the median rent for a sample of student accommodation studios in Sydney and Melbourne properties grew at CAGR [compound annual growth rate] 5pc over 2018-2026.

During 2026, national rent growth was low single digit, with Brisbane pacing higher than Melbourne and Sydney.

CBRE Director, Living Sectors – PBSA, Valuation and Advisory, Rosie Young notes cap rates for PBSA assets in Australia have been broadly stable over the past 18 months, despite the volatility in interest rates which impacted other sectors.

“Whilst there have been some operational challenges facing the PBSA sector this year with the introduction of increasingly tenant friendly legislation, making it easier and cheaper for tenants to terminate agreements early, yields have proven to be surprisingly resilient despite the higher rate environment…investors are taking a long-term view with the fundamentals of the living sector and PBSA still proving highly appealing,” Ms Young said.

For a copy of the 20-page report contact Sameer Chopra at sameer.chopra@cbre.com