Article | Intelligent Investment
Impactful innovations in property and where they’re being leveraged
Implementing the right changes can often drive positive results in real estate. Here’s what works, according to the experts.
March 13, 2025
Innovation comes in many forms. Across the diverse real estate landscape, new and evolving opportunities exist for impactful changes.
Whether it’s reaching big investment objectives faster or creating smarter ways to connect with customers, a new collective of leaders at the helm of some of the country’s most respected property companies already understand what works.
Here’s where they’re seeing the biggest industry innovations today.
"This year and beyond, we will see further innovation and strategies that private capital employs to achieve their investment objectives,” Russell says.
“In recent years, during this global real estate industry reset, we've seen private capital's role significantly increase in areas such as private debt. But we are now starting to see that shift back to real estate equity as relative returns become more attractive and scalable for investors.
“We see the industry opportunity and challenge being in how we respond and engage with private capital as their needs vary and the sophistication of their investments evolve.”
While the industry is familiar with pooled funds, non-traded REITs, partnership and club structures, more investors are now moving towards direct property ownership. This means either managing internally if they have sufficient teams and resources, or using managers through mandate agreements.
Proutt does note that within each of the structures, there's variance across terms to keep in mind, whether it be liquidity, fee structures, investment styles or return requirements. Additionally, within each of those components there's also constant evolution.
“Ultimately our success will be relying on being able to respond and match capability with the needs of those investors,” he says.
“It's the activity and role of private capital in our markets, which will be transformational for the industry. Other considerations for AI and digitisation are absolutely relevant in terms of the size of investable opportunity. But the associated investment will be driven largely by private capital, as shown by some larger transactions in 2024.”
“The waste that exists in fitouts is extraordinary and I think it's something that the industry, as a whole, has not owned up to, whether it be financial waste or the environmental waste.
“We see it as a landlord because we own these assets for 20 to 50 years. So, we see what happens when a customer leaves and is responsible for making those decisions around design and delivery of fitout.”
Du Vernet believes that there are better methods that can simultaneously address the customer desire for more turnkey type solutions.
“Decision makers in businesses today don't want to have an elongated purchasing process and the hassle that goes with appointing an architect, a project manager, a builder and going through the design details.
“That's not their core business and they've been forced into doing that because the options available to them and the preparedness of landlords to roll up their sleeves and deliver solutions as opposed to vacant space hasn't really been there.
“All of the landlords in this space are alert to this issue. It seems like an obvious place for us to lean into and certainly encourage all our peers in the space to do the same as its good for customers, our investors and the environment.”
One peer on the same page is Growthpoint Properties Australia CEO, Ross Lees, who’s seen what innovation opportunities in the environmental space look like. Lees talks about the difficulty of navigating the plethora of environmental ratings for existing buildings, while new buildings can be rewarded with Green Star ratings.
“You're not able to get that Green Star certification for an existing 40 or 50-year-old asset because it's a certified As Built rating. And it's probably encouraged some corporates to go to a new build rather than repurposing an existing building.”
When looking at carbon emissions in a net zero world, Lees says that the embodied carbon sitting within an asset isn’t being factored in when tenants are moving out of the old building and going to the new.
“Office is the classic of a new fitout is good for five years, and then it's back into landfill. How can we repurpose fitouts? How can we reuse existing buildings, not create the new supply, use what's there, and find ways to put scores around that so people can actually go into those buildings? That's the piece of innovation.
“I think we're seeing more on it with a few more ‘brown-to-green' strategies.”
“All of our customers’ businesses are going through enormous change. That’s why we’re looking at how to understand what role the real estate or infrastructure asset plays in their business,” says Du Vernet.
“The retail sector has done this best, having been forced to deal with all the changes in disruption with online. From a logistics point of view and arguably in a world where vacancy rates have been zero in places like Western Sydney, it hasn't forced people to be disciplined around understanding the customer supply chain.
“When there's a bit more vacancy in the system, understanding how your asset fits into your customer supply chain, what is the actual cost, and how do you think about what's important to them, will be a good starting point.”
Whether it’s reaching big investment objectives faster or creating smarter ways to connect with customers, a new collective of leaders at the helm of some of the country’s most respected property companies already understand what works.
Here’s where they’re seeing the biggest industry innovations today.
Rise of private institutional capital
GPT Group CEO Russell Proutt sees private capital continuing to have a transformational impact on the real estate sector. This view comes from the fact that private capital is already the dominant form of institutional property ownership globally, far outpacing the scale of publicly traded or listed real estate companies."This year and beyond, we will see further innovation and strategies that private capital employs to achieve their investment objectives,” Russell says.
“In recent years, during this global real estate industry reset, we've seen private capital's role significantly increase in areas such as private debt. But we are now starting to see that shift back to real estate equity as relative returns become more attractive and scalable for investors.
“We see the industry opportunity and challenge being in how we respond and engage with private capital as their needs vary and the sophistication of their investments evolve.”
While the industry is familiar with pooled funds, non-traded REITs, partnership and club structures, more investors are now moving towards direct property ownership. This means either managing internally if they have sufficient teams and resources, or using managers through mandate agreements.
Proutt does note that within each of the structures, there's variance across terms to keep in mind, whether it be liquidity, fee structures, investment styles or return requirements. Additionally, within each of those components there's also constant evolution.
“Ultimately our success will be relying on being able to respond and match capability with the needs of those investors,” he says.
“It's the activity and role of private capital in our markets, which will be transformational for the industry. Other considerations for AI and digitisation are absolutely relevant in terms of the size of investable opportunity. But the associated investment will be driven largely by private capital, as shown by some larger transactions in 2024.”
Office fitouts that help the world
Dexus is a company that manages a high-quality Australasian real estate and infrastructure portfolio valued at $54.5 billion. As one of the region’s largest players, it has plans to shake up the way that tenants, landlords and investors think about office space – particularly fitouts, which Dexus CEO, Ross Du Vernet, is passionate about.“The waste that exists in fitouts is extraordinary and I think it's something that the industry, as a whole, has not owned up to, whether it be financial waste or the environmental waste.
“We see it as a landlord because we own these assets for 20 to 50 years. So, we see what happens when a customer leaves and is responsible for making those decisions around design and delivery of fitout.”
Du Vernet believes that there are better methods that can simultaneously address the customer desire for more turnkey type solutions.
“Decision makers in businesses today don't want to have an elongated purchasing process and the hassle that goes with appointing an architect, a project manager, a builder and going through the design details.
“That's not their core business and they've been forced into doing that because the options available to them and the preparedness of landlords to roll up their sleeves and deliver solutions as opposed to vacant space hasn't really been there.
“All of the landlords in this space are alert to this issue. It seems like an obvious place for us to lean into and certainly encourage all our peers in the space to do the same as its good for customers, our investors and the environment.”
One peer on the same page is Growthpoint Properties Australia CEO, Ross Lees, who’s seen what innovation opportunities in the environmental space look like. Lees talks about the difficulty of navigating the plethora of environmental ratings for existing buildings, while new buildings can be rewarded with Green Star ratings.
“You're not able to get that Green Star certification for an existing 40 or 50-year-old asset because it's a certified As Built rating. And it's probably encouraged some corporates to go to a new build rather than repurposing an existing building.”
When looking at carbon emissions in a net zero world, Lees says that the embodied carbon sitting within an asset isn’t being factored in when tenants are moving out of the old building and going to the new.
“Office is the classic of a new fitout is good for five years, and then it's back into landfill. How can we repurpose fitouts? How can we reuse existing buildings, not create the new supply, use what's there, and find ways to put scores around that so people can actually go into those buildings? That's the piece of innovation.
“I think we're seeing more on it with a few more ‘brown-to-green' strategies.”
Connecting better with customers
At the asset level for all sectors, customer orientation is an area that’s ripe for innovation.“All of our customers’ businesses are going through enormous change. That’s why we’re looking at how to understand what role the real estate or infrastructure asset plays in their business,” says Du Vernet.
“The retail sector has done this best, having been forced to deal with all the changes in disruption with online. From a logistics point of view and arguably in a world where vacancy rates have been zero in places like Western Sydney, it hasn't forced people to be disciplined around understanding the customer supply chain.
“When there's a bit more vacancy in the system, understanding how your asset fits into your customer supply chain, what is the actual cost, and how do you think about what's important to them, will be a good starting point.”
Talking Property with CBRE
Showcasing unique insights, perspectives and potential through thought provoking conversations amongst our subject matter experts and industry leading guests.
