IBISWorld has revealed the 2016 list of Australia’s Top 1000 companies with LendLease revealed as the property sector's top real estate business by revenue, while Melbourne rising star, residential developer Central Equity made its debut on the list with $599 million in revenue.
The report offers detailed and diverse insights into the nation’s most successful companies, growing and declining sectors, and new businesses to watch in 2017-18 and beyond. The companies on the list account for $1.98 trillion in revenue. Approximately two-thirds of companies on the list reported an increase in revenue for the year, with total revenue for the list growing by 1.9% since IBISWorld’s 2015 Top 1000 companies list.
There were strong performances too by Vicinity Centres and Brookfield Multiplex with $961 million and $756 million in after-tax profit respectively.
Source: IBISWorldThe bulk of growth in real estate has come from rising residential property price, the report said, after housing prices increased substantially during 2015-16. IBISWorld's residential housing price index increasing 7.3% over the year.
Real estate revenue generally rises as property prices increase, as agents receive commission. However, many agents have not increased their commissions due to strong competition in the industry. Brookfield Global IntegratedSolutions was a newcomer on the list, coming in at 735 after it acquired the remaining share in Brookfield Johnson Controls Australia, previously a joint venture with Johnson Controls Inc.
Sluggish growth in traditional investment streams has caused many investors to turn to other assets, such as commercial property. This has increased interest in commercial property investments, which are typically managed by non-residential property operators.
Australia's increasing white-collar workforce and transition to a service-based economy have boosted demand for office property operators, as many businesses rent office space through property operators. Rising rent costs for retail property have helped lift revenue for retail property operators.
Online shopping has created strong demand for warehouses and other supply chain-related property, increasing demand for industrial property and boosting revenue for related operators, according to the report.