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The flexibility of serviced offices has galvanised their position in the office property market. Catering to clients looking for prestigious locations minus the hassle of locking into a 10-year contract, serviced office lessors have been able to generate impressive growth over the last decade. For these reasons, industry research firm IBISWorld has added a report on the Serviced Office Leasing industry in Australia to its growing industry report collection.
Melbourne, Australia (PRWEB) October 09, 2012
The flexibility of serviced offices has galvanised their position in the office property market. Catering to clients looking for prestigious locations minus the hassle of locking into a 10-year contract, serviced office lessors have been able to generate impressive growth over the last decade. As corporate activity surged, the dearth of office property vacancies was a boon for industry participants. However, this prosperity was short lived as the financial crisis swept through the country. According to IBISWorld Industry analyst Ee Jen Lee, “As businesses scrambled to salvage their operations, firms scaled down their workforce and delayed projects”. Across Australia, as tens of thousands of workers were made redundant, the need for additional floor space declined dramatically. The drop in revenue in 2007-08 and 2008-09 resulted in 0.9% annualised growth over the five years through 2012-13. Compounding the severity of the situation is the high office property vacancy rates in Melbourne and Sydney. As business confidence is expected to remain flat in 2012-13, revenue for the Serviced Office Leasing industry is projected to grow 2.2% in 2012-13 from the previous year to $520.3 million.
As economic growth is expected to return to historical trends, IBISWorld forecasts that industry revenue will grow over the next five years. The shortage of prime property in resource rich states of Western Australia and Queensland is expected to drive demand for serviced office space; however, the elevated number of vacancies in Melbourne and Sydney will depress overall industry revenue growth. Beyond this, technological developments and changing workplace cultures are anticipated to enhance demand for mobile workplaces. “As more corporations move towards increasing workforce flexibility, industry participants are best positioned to offer such solutions”, says Lee.
Overall, IBISWorld expects the Serviced Office Leasing industry experienced a rising level of market share concentration over the past five years to 2012-13. However, concentration has remained low as the industry is highly fragmented. The industry’s fragmentation is evidenced by the operations of companies such as Serviced Office Network. The company provides a range of services to a significant network of independent serviced office providers, indicating a large number of industry operators are owner-operators. The three largest players in the industry are Regus Australia Management, Servcorp, and Corporate Executive Offices.
For more information, visit IBISWorld’s Serviced Office Leasing report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry rent or lease fully furnished office space to businesses on a part-time or as-needed basis.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
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