Insider Access: Property Leaders’ Summit 2025

Hello and welcome to Talking Property with CBRE. I'm Catherine House, your podcast host, and in this latest episode, I'll be taking you for an exclusive behind-the-scenes peek at the Property Council of Australia's Property Leaders Summit. The summit is the hottest property ticket in town. Staged each year at Parliament House, it gives invited senior leaders the opportunity to dissect the factors shaping the property industry and to be very frank in their discussions as they're governed by the Chatham House rule. The summit connects property investment decision makers from around the globe, with delegates also given an insider's view of the political landscape by key leaders from all sides of government. So, to take us into the tent, I'll be joined by Property Council President, Carmel Hurrigan, and by our CBRE Summit attendees, CEO Phil Rowland, head of debt and structured finance Andrew McCasker, and head of client care, Kate Heaney. CBRE Investment Management's head of indirect real estate strategies, Alex Crossing, will also be joining us. First, we'll get the helicopter view from Carmel, and then it's going to be a rapid fire discussion with our CBRE attendees. So let me take you into the tent. Carmel, thanks so much for taking the time out today. I know you have such a busy schedule, and I believe you're joining us from Canberra. I am, Catherine, and it's always a pleasure to catch up with you as per usual and the CBRE team. Yes, I am joining you from Canberra after pretty much a wonderful two and a half days down here for the Property Leader Summit. Fantastic. And has the mood shifted much? I spoke to you after last year's summit, it was all about housing. What was the mood there? I was really positive after leaving the final function last night. You know, great feedback from all the delegates that attended, and it was really well attended this year by a mix of investor groups and managers and foreign investors. And the way the agenda was structured, we really started the first day with really setting that scene for where Australia is now on a relative basis versus the rest of the world. Because obviously, the geopolitical risk is probably that was front of mind rather than housing. And how does what's playing out in the U.S. and tariffs and Trump's behavior and uncertainty generally in the world, how's that going to impact Australia and our performance over the next three to five years? So we sort of started thinking about that when we had a great first three sessions with economists from around Australia who came in, and we also had foreign economists come in to talk to us about how they were seeing Australia. And then we also had demographics. So we talked about standing back from everything if you just look at Australia at the moment and where population growth is and the way that we are aging and so on the Australian market. We are set for significant growth to continue. And I think that put a real positive spin on the day that we will live through this uncertainty and we've got a lot to take advantage of as an industry. Yes. Great to see that positivity really starting to come through. Did you have one or two real key takeaways from the summit? Yeah. Look, I think my key takeaway is that Australia is likely to see more capital flow. So incrementally more capital flow on a relative basis compared to the rest of the world. That the priority market, which traditionally has been the U.S. at such a gateway large scale market for global investors, yes, will never fall off the list. However, maybe what's going on the U.S. at the moment and with what's happening with the recent announcement on taxes and foreign investor taxes, that has really given a lot of confidence that Australia will see more capital flows coming through Asia pack. Asia pack will turn to be a priority market if it not already is and Australia will get its share, significant share of that pie. That's the first thing I would say. So we're in a good position. The second thing I would say is just demographically the population growth and so on. And yes, we've had some pretty soft data come out yesterday from GDP forecast, but still on a relative basis, we look set for reasonable growth. And I think the third part is that we've had definitely a rebalance and a reset in values across all sectors. And we are at an inflection point and we are at a point where most sectors, most managers, we've got pretty sophisticated managers in this country have refied on their capital management strategies and they've had a devaluation across their book and the forward looking returns are looking good. Around that, you've got declining interest rates, so the rate settings are looking positive for us. And that's probably the key message that, hey, we've got some real wins that we can take advantage of. It's been hard times over the last four years as we've had those rate sets come through, but that's probably turned. And I think the final thing I'd say, there was a far more discussion on cash flow and the fact that all sectors are probably going to see pretty solid rental growth coming through because supply constraints through the Australian market. So construction costs have risen to such a level that it is getting very difficult or there's a massive gap in terms of economic rents required across most sectors. So I'd say there are probably some of the property fundamentals. It's interesting. I think a lot of our brokers had a mantra of survive till 25. And it looks like 26 is going to be that year when we really do start to see things accelerate. Yeah. And I think that's right because when we think about that, that was another question that people talked about our topic was liquidity. And there's lots happening liquidity in the Australian market, particularly in office. We know we're not blind to that, but there seems to be liquidity from a transactions point of view, returning at all different levels, which we think is positive. Just on housing, I just touched on that. I think housing remains an absolute generational critical issue in Australia and it is going to take years for us to fix. But our interactions with the government were really based around a few things. The first one was what are the appropriate tax settings that need to be put in place in Australia so that we can get more international capital to fund the things that we need to be doing. And housing is a key component of that. And a lot of the housing that's being done at the moment is being funded, particularly BTR from offshore investors, not domestic. And we're really conscious of that. The tax settings, we talked about productivity, a lot of talk, and it's a bit of a throwaway line and everyone's using it, but what does it mean? How do we get moving on this? And we had a number of ministers come and talk to us about how they're going to change and how they're thinking about productivity, which in the end, if we don't get a productivity change in Australia, it is the only thing that's going to drive our living standards and we'll see them going backwards if we can't get a grip on it. But it is a decade-long problem. Which has been decades in the making. Absolutely. So did you have any aha moments when listening to the sessions or is there one thing that you'd like to see happen this year that could be a real market mover? Look, from a personal point of view, I actually felt pretty good about office. Now, I'm an office CEO, but I hate to be biased, but there was a few people on stage who were actually saying, actually, offices reach that point where we are going to see things pick up and it's starting to look attractive, particularly the Australian office market. International investors as well are believing and can see that Australia is different. And that's taken a long time as you know, Catherine, to actually get that sell. And I think it has taken a reset in values as well. So that's really positive. The other sectors, I think, no real aha moments. I think everyone knows they're in a good position, but I think just generally people felt positive. You know, there was a lot of camaraderie in the room and I thought about that just from my role as President of the Property Council. Geez, we've got a really competitive industry, but actually we can all pull together to get things done. And particularly, you know, when it comes to lobbying the government. So the one thing that we really hope as an industry that we could see happen this year is the Labor government is a massive majority. We talked about that. You know, what's it like to govern and are we going to have a really serious competitor in the coalition? And, you know, there was a lot of discussion about to have a really good government, you need a really competitive coalition. And hopefully the Albanese government recognizes the gift that they've been given and will continue to work on, as Chalmers has said, that they'll continue to work on this productivity issue. But the tax settings, particularly in Victoria, I think a lot of people in the room were just, you know, that would be amazing. If we could get the government, the federal government to help us with the state government on unlocking some of those taxes, which has been put in place, 47% of the budget take is coming from property taxes in Victoria. That is outrageous. And so I think that's an area where everyone is, is focused. And then one other part I'd say is I don't think this PLS was as focused on housing. Housing is an issue. But the way we're talking about that now, the Property Council, is there's really three big areas for us. And all the sectors are involved. And one is that those tax settings, appropriate tax settings and investment settings. The second is productivity. What are we doing there? And the third is just making sure that the Property Council itself is being able to have the right services, getting that real value contribution. So that's where we're focusing. And underneath all that, if we get those planning settings right and productivity settings right, we will unlock housing and we'll also unlock industrial land, we'll fix the problems with power supply, water supply, infrastructure. All those things are critical to the members. Did a podcast where I talked about the housing summit that you had down in Melbourne and the Productivity Commission I was talking about relating it to Bob the Builder and you know, can we fix this? And her view was, yes, we can. So it sounds like with the right intentions, we really can fix these issues. Yeah. Look, I think that's right. Everyone's wide-eyed. Everyone understands. It's going to be hard. And one of the things that was discussed, which I thought was interesting and probably really true, and I think you would agree with this, is that back in the Keating Hawk days where they made those massive gains in productivity, there were Australia-wide strategies. I'm going to float the dollar deregulation, blah, blah, blah, blah, blah, you know, microeconomy reform and all that sort of stuff, the accords, all that. They hit all parts, but now we're a much larger and more diversified economy. The view, one of the discussions from one of the ministers was actually, we're serious about productivity, but it's going to have to be a sector-by-sector strategy this time. We won't be able to just solve it with one, two, three, or four, you know, overall policies, which was amazing time in Australia's history, right? So it is going to be harder in that respect. And I think as an industry and as, you know, the people who are leading different companies are really going to have to work with us to try and come together to get the right messages, to get the right policies on different things, which I think we're doing quite well on housing, to be honest. The feedback we do get from state premiers is that, and from the minister, Clara Neal, who's been very strong in the way she's working with us, she's been great. I think we're doing it, but we're just going to have to keep our eye on the ball. Well, it was really great to get your view of the conference, Carmel, and thanks so much for joining Talking Property once again. Thank you. Good to see you, Catherine. I'm now joined by CBRE's Pacific CEO, Phil Rowland, who many of you would know from his Quarterly House View podcast. Thanks for joining me today, Phil. Glad to be here with you, Catherine. So I was hoping you could give us some insights into the session about demographic trends and government priorities. I know it's something CBRE is really focused on through its consulting work with both government groups and private industry. What was the sentiment in the room, and what was driving the conversation? Yeah, well, it was a great session, Catherine, it really was, it was very, very insightful. But I think the main takeaway, I think, that I took from that is that all the demographic analysis reinforce the comparative advantages that Australia has in the world, and, of course, it just underpins the long-term fundamentals of the Australian property sector. Yes, I got that same feeling from Carmel when she introduced this podcast. She said there was a lot of positivity in the room. Yeah, definitely. Well, I think there was a lot of positivity in the room, broadly for where we are in the cycle and things, but specifically the demographic session just reinforced, as I said, these things that really are strong tailwinds for Australia, and the main driver of that, of course, is just as the world's population grows, Australia is going to be a beneficiary of that. Our primary industries, such as agriculture and commodities, for example, they're going to continue to be a really solid foundation for our economy. And, of course, the country's been a great beneficiary of population growth. That's going to continue to provide a real strong tailwind for growth and prosperity for the country, and, of course, it supports all the asset classes in Australia, particularly in the living sector, of course. Yes. Are you seeing anything else that might influence the market moving forward? Look, for me, Catherine, I think probably one of the biggest takeaways, and, of course, being in Canberra, you always get a good sense of this, but one of my takeaways from the summer was just the fact that the continuity of government is going to enable us to have progress on some of these really big issues that need two terms of government to be able to make an impact on. Housing is obviously the biggest one, and we had Clare O'Neill give a very engaging perspective on that, but there's obviously big focus on energy transition, big focus on productivity. I think having continuity of government through a couple of terms is going to make a difference. With that being said, we do need to have an effective opposition. There are some very concerning policies that are being proposed, and I think we're all tuned in, obviously, to the policy on the super tax on unrealised gains. That's very, very concerning. We need a solid opposition to be able to fight that, and, of course, there's still a lot of focus on the debts and deficits that must be tackled, especially at a state level. So whilst continuity of government is good, I do think there's obviously some things that we need to work on as well. Yes, it was interesting. Kamal said the same thing about having a strong opposition and how important that's going to be moving forward. So any aha moments for you? Did you come away with anything that really stuck with you? I'll give you one, and that was just the data centre market. I mean, it's where number two behind the US, Australia's on the path to be the central hub for data centres for APAC. Yeah, I think we just had a data centre report come out that delved into some of that. So it's going to be a really exciting time, and obviously, a lot of the big Australian groups are targeting that data centre market at the moment. Yeah, absolutely. And so overall, Catherine, it was a great summer, and a really good tailwinds for all sectors in Australia. It's really good. Well, great to get your insights, Phil, and I am looking forward to your next Houseview podcast in July. Look forward to it. Thanks, Catherine. Next in the hot seat is CBREIM's Alex Crossing, who joined me last year for our Talking Property Prediction series. Thanks for coming back on the show, Alex, in our new Sydney podcast studio. It's very impressive, Catherine. I know, I feel very professional. So I'd love to get your thoughts about the session which looked at real estate investment in an era of disruption, which was all about adapting capital strategies, rebalancing portfolios, and identifying opportunity amid uncertainty. Firstly, what sentiment seemed to be driving the conversation, or did you have any key takeaways? I suppose overall, there was a cautious optimism, should I say. There was a lot of discussion of the last few years and where we are in the cycle. Obviously, the movement in bond yields and cash rates over the last five years has fundamentally impacted valuations and price expectations, but also, in some sectors, we've seen the return of rental growth, where it might have stalled in the past, or an acceleration in rental growth, I think, about industrial. There was a recognition that, also, that lovely tailwind that we all had in the late teens with declining cash rates and compressing cap rates. That expectation is no longer there. The forecasts are all for bond yields and cap rates remain pretty stable once they've sort of settled down. So cash rates, I think, now low threes. Looking ahead for those that were in the session was really about getting the assets in your portfolio to be in the right markets, the right kind of assets that clients or occupiers or tenants want, and also being able to really maximise and drive the income profile of their assets. I think there was a lot of talk about why we hadn't seen large-scale distress compared to the last time we had a downturn for being the GFC, and I think the view was that, coming into this cycle, everyone had learned their lessons and bore the scars and were coming in with a lot less leverage. Yes. And the banks being a lot more patient? Yes. I think the banks also, we'd all learned our lessons, shall we say. Yes. So a lot of people have been able to get through this period, and now I think there's a view that values have re-based, and looking ahead, probably, well, we don't have the tailwind of declining cash rates and cap rates. We do have potential benefit of a lack of new supply, just given rising construction costs and the higher holding costs, and the implications that that could have vacancy, and therefore potential for larger than expected rental growth if you're in those preferred markets. So that whole idea of Simia Choprao, research, you're talking about premiumisation? Absolutely. If you're not in the place where your tenants need to be, then I suppose you could be anywhere. So your assets need to be where your customers essentially need to be, and they need to be there because that's where their customers need to be. So I suppose that has that element of uniqueness, and if you are in a unique location, then you're able to offer something special, and therefore you can drive your rents. And with the lack of new supply, that will only intensify. Yes. So how else could this influencer market moving forward, what was discussed at that particular session? I think some of the takeaways from that session are probably linked into the demography session that we had earlier, and I thought there was an interesting part showing from the census data since '96, the percentage of work from home. And up until COVID, it had obviously been around four and a half to five and a half consistent in that consistent range. And then we saw a big jump in 21 per cent over to 2021, and his expectations were that in the 2026 census, that's probably going to land around 15 per cent. And that probably gelled with what was a lot of the discussion from the panel was really saying that there was a feeling that occupiers now have a sense of what their staff require with regards to work from home, and where maybe a few years ago there was a hesitancy because they didn't know how to plan ahead, and what would it look like this new normal. It seems that a lot of occupiers, particularly of office, are feeling more comfortable about making those longer term decision, which could also help from an investment perspective. You can bring that into the lease negotiations and the mount space and all that. That extra element of certainty will obviously help to drive performance in the longer term. And so this is a question that I've been asking everyone about 'aha' moments. So was there anything from the summit that springs to mind that was a real 'aha' for you? I think that Bernard Salt, which I just mentioned earlier, you know, markets hate uncertainty. We've currently got a lot of uncertainty on the geopolitical front, but at least if people have a sense of whether their employees are going to turn up and how many days that gives some help to planning, even if you can't plan whether the tariffs are going to change next week. Oh, yes. Oh, the next day. Yes, exactly. Yes, or how everyone's going to react or the spillover affects GDP and the like. Thank you for joining me, Alex, and I hope to get you back on talking property soon. Thanks, Catherine. Always a pleasure. Next up, our Pacific Head of Debt and Structured Finance, Andrew McCaskar. Welcome back, Andrew. Thanks, Catherine. Always good to be back. You moderated the summit's real estate lending session, which delved into the key market risks and opportunities and how to capitalise on emerging trends. So what sentiments seem to be driving that conversation, and what was your key takeaway? Look, Catherine, it was a very good panel, and we had good representation across domestic banks, offshore banks, and private credit market as well. And the biggest takeaway for me from that was the availability of capital, be the style of transactions that the banks are doing, and then how the private credit space is not only working with the banks, but also complementing the structures that are being put in place for lenders in today's market. Yeah, there seems to be a lot in the media headlines about private credit at the moment. Yeah, and we've seen private credit emerge. I think I opened up the conversation along the lines of we were calling it non-bank, and then alternate lending, and it's finally landed on a space of private credit. And I think that is actually the name that sits well with what they're doing, and they're up and down the full debt stack. So we can participate in lowly leveraged development transactions through to quite highly leveraged, highly structured transactions that are allowing people to be able to participate in the market, which they may not have been able to do under normal banking circumstances. So from what you heard from the panel, how do you think that we might see the market shifting moving forward? Look, I think we're very fortunate in Australia that we've got a strong banking market, and that was as a result of the GFC and the way that the regulator and the banks work together to ensure that we didn't roll into another one of those situations again. And because of that, we're seeing the banks be a little bit more aggressive in what they can do, but also be able to support the market as it continues to grow. So, million dollar question. Did you have any aha moments from the summit? Look, from the summit in general, I thought the Bernard Salts seminar on demographics, as always, was very enlightening and truly sort of rammed home what our head of research Samir has been saying, is that a number of people that we have coming into Australia and the population growth that we've got going forward, Australia is absolutely set for a property boom. We just need more housing on the ground. We also had a very good insight from the government around what the government support is going to be as they continue to drive out and try to solve for some of those housing problems that we are currently in and potentially will become worse if we don't start to develop and deliver more housing into the market. Andrew, I always love hearing your perspectives. Really good to catch up again, Katherine, and look forward to doing it again shortly. To round us out, I'm really pleased to welcome CBRE's head of client care, Kate Heaney. Welcome, Kate. Thanks, Katherine. I don't think I've had you in the hot seat before on talking property. I've done a few, but they're better now with you leading. That's very kind of you to say. You are closing us out, and we're going to be talking about data centers. There's been so much interest from investors, fund managers. The session at PLS was all about the growth potential, opportunities, and the long-term outlook. What was the sentiment at that session, and what were people talking about? Katherine, it was a fascinating session, amazing lineup on the panel, and also a very well-attended session, I will say. It was amazing how many people did turn up. I think the opening, particularly as Penny Ransom said, that this is the fastest-moving train. The more that this team went through the fundamentals, the appetite, etc., you left really realizing that this is extraordinary and it is fast, and as everyone would say, a nascent sector, and it is in its early stages in every character and trade of what it could be, rapid growth and innovation. Extraordinary. How is this going to shift to the market, do you think? I think the fascinating element about it was just some of the facts on when we say shifting market and the scale and that speed. There was a lot about, hey, about future proofing, but at the same time, the conflict of that with obsolescence. If you're doing something and going at such pace, do you risk obsolescence? If you look at the characteristics alone, we heard so many stats on the panel about projected to grow 50% in two years and 170% in 2030. It's just extraordinary scaled through AI, enterprise, digital transformation, etc. And then there are other elements about that, too, that if we're going at such pace about the vacancy, everyone's sort of tracking a little bit around vacancy, which is operating at the moment below 5% in Australia, 5% globally, and below 1% in the US, so this is extraordinary figures and the need to meet that demand was extraordinary. And if you think about the megawatt demand, one to three megawatt requirements sub five years ago, and now we're at 300 megawatt. So I got so excited by the stats and there are some very smart people trying to work out the ways to kind of meet the demands of this market and this asset class. Yes, because power is such an issue, as you talked about, but we are seeing so many different people coming at this from both global investors, local investors. So we're really interesting to see how the sector plays out, particularly in Australia earlier in the podcast, talking about the fact that data centers, we're sort of one of the number one markets in the world in terms of attracting attention. So in terms of the summer overall, I've been asking everyone this question, did you have any aha moments? I've said a lot, Catherine, and some fitting within this data center arena. So a couple of things I learned about that, you know, not being a homogenous market, and I found that really fascinating from the point of view that we can't keep drawing, you think of data center and cloud and AI and the draw globally, but actually we have to meet demand in market before we can look at the relative draw globally, or, you know, across the ditch, for example, you have to meet local demand because of the government regulatory position, so many other areas that is in the unknown. I learned so much around the potential for Australia in their scale and influence in the data center arena, and the fundamental screen so well in comparison to any of the other nations. And I think the other parts around that meant that, you know, lack of concern really about companies such as DeepSeek, because someone like that is a hyperscalary is really forcing and driving the unit cost to compute down in the longer term. So we just need to look at the balance of our concern versus meeting demand and capacity, and therefore that development and deployment and capability at a local level is critical. So we have to work really closely with government on the planning and all the other processes in order to develop this asset class, because they themselves are such an incredible driver of demand. It's understanding the needs, addressing elements such as planning, sustainability that probably has a few people concerned, but this is a genuine partnership for investors, for government and for operators. I love the idea of partnership, and it certainly is going to be a fascinating sector to watch going forward. Thank you so much, Kate. In your role, you always have your finger on the client pulse, so it was great to hear your takeaways to close us out. So Katharine, we also need to make sure that for the customers who are working in this space, that when they're investing one to two billion, we've got to make it as a great experience for them in order to see Australia as a great destination. We are a great hub for the world, and particularly for Asia. But we also need to balance that, making sure that it truly is a sustainable industry. Kate, what about aha moments from the summit overall? Katharine, you know what I love is when the research folk come at the beginning to give some interesting insights and stats, or great industry legends such as Bernard Salt. I found it really interesting when he said, you know, the aged care freight train is headed straight for us. And when you looked at the data where we will peak at those above 85 years of age at 2032, it was extraordinary. It's quadrupling the position that we have. And also that really drives the care economy. So it's on the rise, AI may be changing and people are concerned about jobs, but there are so many jobs that really we need to be far more focused and ready for. Obviously, we talk constantly about rate cuts, it's so expensive to build. So rate cuts can be great, but at the same time, we need to be able to build. And then the other facts that came from PJIM, there are a lot of old buildings, buildings over 20 years of age that was extraordinary, that we're wanting premium and we're wanting sustainability. But if you look at the stats, something like 90 percent of offices in the U.S. are over 20 years of age. So we've really got to try and look at what the secondary asset class across every sector, how we're going to address that and bring it into a better, either the premiumization, I suppose, and sustainable for the future, easier for a shed than it is for an office tower. Well, thank you very much, Kate, really appreciate you coming on the show and hoping to have you back soon. Thanks, Catherine. To our listeners, thanks for tuning in. I hope you enjoyed your exclusive access pass to the 2025 Property Leaders Summit. If you like the show and want to check out more, you can subscribe through Spotify, Apple Podcasts or your favorite podcast hosting platform. We'd also love it if you could rate or review Talking Property to help spread the word. And if you have any questions or feedback, you can drop me a note at any time via Talking Property at CBRE.com. Until next time.