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Rising holding costs, design and construction expenses and operating outgoings are putting unprecedented pressure on economic rents across the Australian property market.
For owners, developers and investors, the challenge is no longer simply about growth—it’s about making sharper, more informed portfolio decisions that preserve value and support long-term returns.
“Every dollar of capital now has to work harder,” said Linden Quin, principal at CBRE.
“For property owners and investors, it’s no longer enough to respond to the broader market—property strategies need to be positioned for growth, withstand cost pressures and involve the right partners to achieve sustainable returns.”
In today’s market, resilience begins with a robust strategic foundation. That means moving beyond high-level forecasts and engaging deeply with asset-level analysis.
Site due diligence, property assessments and feasibility studies are playing a greater role in determining which projects stack up and which capital commitments should be progressed, deferred or reallocated.
Quin notes that a sharper focus on analysis is helping investors navigate uncertainty.
“Cost escalation is hitting both new developments and existing asset renewals. Each dollar must be directed where it has the most measurable impact—whether that’s in project feasibility, asset value growth or overall portfolio resilience.”
To achieve this, many asset owners are turning to better quality, highest-and-best-use analysis and options modelling.
These tools allow stakeholders to test multiple scenarios, compare potential outcomes and evaluate exit strategies, all before major capital is committed.
Strategic development advice is also moving to the forefront.
From site assessments to navigating planning approvals, delivery structures and partnering models, having a clear pathway through the regulatory and procurement landscape can make or break project viability.
Land value optimisation is another focus, as owners seek to unlock embedded value and position assets to compete in increasingly tight markets.
Together, these disciplines create the framework for capital decisions that are both informed and defensible—giving property owners and developers confidence to advance projects and investors the assurance their portfolios can weather volatility.
“It’s about knowing which levers to pull, when to pull them, and making sure every decision supports the long-term income story,” Quin said.
Once a robust framework has been established through due diligence, feasibility analysis and development planning, the focus shifts to execution—turning strategic decisions into outcomes on the ground.
According to CBRE’s head of specialised transactions, Liz Crotty, the two biggest hurdles at this stage are cost and program.
“Owners, developers and investors need to be able to deliver strategies that don’t just look good on paper but that stand up commercially once delivery timeframes and risk assumptions are factored in,” she said.
This challenge is most visible in complex sectors such as government, education, student accommodation and healthcare, where delivery structures often involve multiple stakeholders and layers of approval.
Crotty explains that execution means taking the strategy that’s been endorsed often via a development agreement, ground lease, agreement for lease or project delivery agreement—and structuring it so the project can move forward.
“Bringing in a joint-venture developer can be the right way to unlock value for clients, but it has to be tested through a risk-profile assessment, projected returns and contractual coverage to protect those returns,” she said.
“We manage that whole process, from early market engagement through to expressions of interest (EOI), request for proposal (RFP), best and final offers (BAFO) and exclusive dealing until contractual close.”
When it comes to government-led projects, the pathways are often more complex again, involving unsolicited proposals, direct dealings and strict probity requirements.
“Our role is to guide clients through that process with the right balance of commercial alignment and compliance,” Crotty said.
She adds that CBRE’s strength is in combining strategy with execution capability.
“We have so much data at our fingertips, and because we’re in the market every day, we can provide genuine end-to-end advice—from strategy and transaction structuring through to delivery and implementation.”
Execution also depends on deep knowledge of the assets themselves. A forensic understanding of condition and lifecycle needs can reveal opportunities to add value or reduce risk that might otherwise be missed.
CBRE Building Consulting practice director Beth Cook said that targeted works often provide the highest returns: “We’re helping clients identify where investment will yield the greatest benefit—from compliance upgrades that reduce operating risk, to planning lifecycle capital replacement in a way that minimises the impact to occupants, and even refurbishments that reposition assets in competitive markets.”
This kind of asset intelligence informs both the strategic and operational layers of decision-making, ensuring that portfolio planning is grounded in the practical realities of asset performance.
Exit strategy planning is also important, whether that means getting on the front foot with vendors’ due diligence to enable a swifter transaction process, or strategising the Make Good process 12 months ahead of expiry to optimise outcomes and reduce rental voids.
Across the industry, several approaches are standing out as investors and developers adapt to rising costs and tighter delivery programs:
Strategic portfolio rebalancing: moving capital into assets, markets and structures that offer lower volatility and better alignment with long-term objectives.
Alternative delivery models: using development agreements, ground leases, agreements for lease or project delivery agreements to share risk, secure tenants earlier and unlock sites that might otherwise stall.
Partnerships and joint ventures: bringing in land developers or capital partners to de-risk projects, improve returns and accelerate delivery.
Sustainability and compliance upgrades: targeting improvements that open access to green finance, protect against regulatory risk and strengthen market positioning.
Capital recycling: releasing funds from non-core or underperforming holdings to reinvest in higher-yield or strategically important opportunities.
Each of these requires both a clear upfront framework such as, feasibility testing, risk assessment and options modelling as well as disciplined execution through procurement, negotiation and delivery.
Market uncertainty may be a constant but the combination of thoughtful portfolio design and rigorous delivery is enabling some investors to turn volatility into advantage.
For Quin, the message is clear: “Portfolios that are designed to anticipate change, rather than simply react to it, are the ones that will deliver durable income streams.”
Crotty agrees, adding that execution is just as important as planning. “The strategy only delivers value if it’s carried through with precision,” she said.
“Making sure capital is deployed where it really moves the dial is what protects and grows returns.”
In a high-cost environment, it is this alignment of strategy and execution—long-term frameworks and day-to-day delivery—that is setting resilient portfolios apart.
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