As the office sector navigates significant challenges, what’s ahead and how the challenges can be met is more important than ever.
Danny Poljak, Brookfield Properties president and co-head of real estate in Australia, will shares his insight as part of the highly anticipated panel discussion, In Focus: Office | Is the Worst Behind Us or Is There More to Come?, part of The Urban Developer’s upcoming Commercial Real Estate Summit.
Ahead of the event, Poljak provided some thoughts on inflation, interest rates, and the office market evolution as a response to long-term remote work trends.
Learn more about the summit here.
Poljak emphasised that inflation and rising interest rates have had a tangible impact on the office sector.
“We’ve seen inflation and higher interest rates affecting both construction and debt costs, which has led to a more subdued outlook for new developments in the coming years,” Poljak said.
This challenging environment has resulted in a more muted supply pipeline, but it has not been universally detrimental.
Poljak points out that despite expanded valuation cap rates, high-quality assets with strong amenities and prime locations continue to perform well.
“The fundamentals for top-tier assets remain robust, with high occupancy and solid rental growth,” he said.
While transaction activity has been somewhat restricted, Poljak is optimistic about the future.
“We’re at an inflection point and expect to see increased transaction activity next year, particularly in key markets like Sydney.”
The shift towards remote and hybrid work arrangements has forced the office sector to adapt, and Poljak outlined how tenants are responding.
“We’re seeing strong tenant demand for top-tier assets,” Poljak says.
In particular, major occupiers are now prioritising buildings that offer more than just office space—they want locations with excellent retail amenities, transport connections and sustainability features.
According to Poljak, these features are increasingly non-negotiable for large-scale tenants.
“Occupiers want buildings that promote wellness, productivity, and sustainability. Properties that can deliver best-in-class facilities and placemaking elements are in high demand,” he said.
For developers and investors, this means an even greater focus on creating spaces that enhance the tenant experience, catering to the evolving expectations of a post-pandemic workforce.
As the sector continues to adjust to these macroeconomic and structural shifts, Poljak sees potential for recovery, driven by a renewed focus on high-quality developments that meet changing tenant needs.
With increased activity on the horizon and a continued focus on placemaking and sustainability, the office sector may well be poised for a gradual but meaningful rebound.
Join the conversation: Commercial Real Estate Summit
To hear more from Danny Poljak and other industry leaders, join the conversation at In Focus: Office | Is the Worst Behind Us or Is There More to Come?, part of The Urban Developer’s Commercial Real Estate Summit.
Date: Wednesday, October 16
Location: Doltone House, Hyde Park, Sydney
Tickets: From $295 + GST
Duration: One-Day Summit
Featuring: 20-plus experts across office, retail, industrial, and alternative real estate sectors
For more information, go to our event website.
