COMMERCIAL CONSTRUCTION TRENDS In VICTORIA: LOOKING AHEAD TO 2026

13 May

Commercial construction — spanning office buildings, retail centres, hotels, and industrial facilities — is set to play a defining role in Victoria’s evolving built environment. As we look toward 2026, the sector is entering a new phase, marked by technology integration, sustainability mandates, and renewed private and public investment.

With the value of non-residential building activity in Victoria projected to reach $18.5 billion by 2026, momentum is building — despite economic headwinds and labour market pressures.

1. Sustainability as a Strategic Advantage

By 2026, sustainability will be a commercial imperative. Developers, designers, and contractors who fail to prioritise environmental performance risk being left behind — not just by regulators, but by investors and tenants too.

Key priorities moving forward include:

Circular construction: using reclaimed and recycled materials like low-carbon concrete and engineered timber to reduce waste and embodied carbon.

Operational efficiency: embedding renewable energy systems, high-performance glazing, and passive solar design to meet Green Star and NABERS targets.

Climate-resilient design: anticipating rising temperatures, extreme weather, and energy security risks through adaptive architecture and infrastructure.

With ESG (Environmental, Social and Governance) criteria now influencing investment decisions, sustainable commercial assets are increasingly commanding stronger market value.

2. Next-Gen Technology: Building Smarter for the Future

By 2026, commercial construction will be increasingly shaped by AI (Artificial Intelligence), AR (Augmented Reality), and digital twins. These technologies are no longer experimental — they’re becoming business as usual.

AI is streamlining planning, budgeting, and resource allocation, allowing teams to anticipate delays, manage risk, and track performance in real time. Expect AI to be central to both pre-construction strategy and on-site decision-making by 2026.

AR and VR are supporting immersive collaboration. 3D visualisations overlaid on job sites help engineers and subcontractors identify errors before they happen, saving both time and cost.

Digital twins — virtual replicas of buildings — are enabling predictive maintenance, energy modelling, and lifecycle management from early design through to long-term operation.

As these tools mature, 2026 will likely see smarter, safer, and faster project delivery — with stronger stakeholder buy-in at every stage.

3. Evolving Asset Types and Growth Hotspots

Victoria’s non-residential pipeline is diversifying, with commercial projects shifting to meet new patterns of working, shopping, and living:

Retail Reinvention: Projects like the transformation of Box Hill Central reflect a broader trend toward retail centres as lifestyle destinations. Expect 2026 to bring even more integration of leisure, health, and community services into retail footprints.

Transit-Oriented Commercial Hubs: The Suburban Rail Loop and other major transport projects are unlocking opportunities for new business precincts around Melbourne’s middle ring. These locations will be increasingly attractive to organisations seeking decentralised, connected office environments.

Mixed-Use Intensification: Urban renewal projects such as Central Dandenong and Arden will continue to drive demand for flexible, mixed-use precincts where commercial space coexists with residential, education, and civic uses.

Challenges on the Horizon

Looking ahead, key challenges for 2026 will include:

Labour shortages: With 162,900 construction workers needed across Victoria in the next decade, skills development will be critical.

Cost volatility: Materials and logistics disruptions will require agile procurement strategies and early contractor involvement (ECI).

Planning reform: Streamlined approvals and zoning flexibility will be essential to keep pace with demand.

Looking Forward

Victoria’s commercial construction industry is entering a period of transformation — one that rewards early adopters, sustainable thinkers, and future-focused developers.

By 2026, success will belong to those who embrace technology, invest in talent, and build with long-term community outcomes in mind.

Kylie is a trusted recruitment specialist in the Property Development and Project Management sector across Victoria and Queensland. If you’re planning for growth in 2026, now is the time to connect.