Mining companies are taking advantage of the booming materials sector by acquiring more CBD office space.
New research conducted by CBRE has revealed that the relative resilience of the major mining companies has led to them expanding their office footprint by 7,500 sqm in the first nine months of the year.
The pandemic has seen a rise in the number of employers now adopting a work-from-home system, lessening the demand for prime office assets and causing industry landscapes to change.
The most notable reduction in office space has been in the communications sector which has shrunk its office footprint by 29,000 sqm so far in 2020.
CBRE Regional Director of Office Leasing, Mark Curtain, said that the materials sector is the only ASX100 group to expand its office portfolio this year.
“ASX listed companies have always been attractive tenants for major office landlords in the Australian market, due to their relative security, financial transparency and prestige,” he said.
“Our research explores how the impacts of a turbulent 2020 have affected the top Australian listed companies’ national office footprint by sector and location and what impact this might have on the future of the Australian office market,” said Mr Curtain.
As the hardest hit capital city by COVID-19, Melbourne was unsurprisingly saw the biggest contraction of ASX100 tenants in 2020, with Sydney and Brisbane’s office footprint reducing.
Looking ahead, it is predicted that certain sectors will see sharper drops in their office footprint, with CBRE Associate Director of Research, Tom Broderick stating that the Financial Services industry will amongst the hardest hit in the coming months.
“Our expectation is that companies within the Financial Services sector are likely to contract the most given their large footprint and cost containment pressures.CBRE Associate Director of Research – Tom Broderick
“Materials will likely remain one of the more resilient sectors as countries around the world boost investment in infrastructure, which will trigger demand for resources, while the health sector is also expected to show future resilience,” Mr Broderick said.