Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Report: By Application (Corporate Offices, Healthcare, Hospitality) – Latest Trends, Growth Prospects, and Demand Forecast Through 2030

Market Overview

The Australian water-cooled heat recovery variable refrigerant flow (VRF) systems market size stood at $14,881.0 thousand revenue in 2021, and the market sales will advance at a CAGR of 8.8% during 2021–2030. Moreover, in New Zealand the market generated an estimated $2,590.8 thousand revenue in 2021, and its growth will advance at a CAGR of 6.8% during the forecast period.

The surging need for energy-efficient VRF systems, heat pumps in commercial applications is the major factor boosting the market growth. To achieve maximum heat recovery and higher energy efficiency and energy savings, these systems are widely used in these countries.

Additionally, the industry is further exhibiting growth on account of the growing population, rising construction activities, and surging real estate industry. The number of dwellings approved during 2017–2021 increased by 0.4% in Australia and 6.2% in New Zealand, thus depicting growth in the real estate and construction industry in both the countries. The growth in sales of equipment in both the countries have been significant due to their subtropical climate, which leads to hot summers and relatively cool winters.

The preferential trend towards green buildings, along with governments’ energy efficiency regulations, has led to an ever-growing demand for VRF systems across the countries as it acts as a complete heating, ventilation, air conditioning solutions for the building.

Additionally, New Zealand Green Building Council is contributing to building green homes, for lower carbon emissions. The country’s target is to update the New Zealand Building Code to ensure all newly constructed buildings are 100% carbon-free by 2030. The zero carbon buildings are described by the council as having low levels of heating and cooling demand and high-performance heating, hot water, and lighting systems.

Moreover, the World Green Building Council (WorldGBC) pledged to cut embodied carbon emissions by 40% by 2030 and achieve 100% net-zero emissions for buildings by 2050. Further, the Green Building Council of Australia (GBCA) is expected to construct only certified green buildings by 2050 in Australia. These stringent regulations will bound to boost the requirement for VRF systems in Australia and New Zealand.

Due to the COVID-19 pandemic, manufacturing activities in 2020 were slowed down thus causing a decline in the demand for water-cooled heat recovery VRF systems. The value addition by the manufacturing industry in Australia and New Zealand declined by 2.2% and 1.4% in 2020. Due to the lockdowns, many companies faced huge revenue losses, since the sale of VRF systems declined as the consumer spending power was affected. Due to the outbreak, companies faced operational challenges due to the implementation of safety protocols and thus causing manpower shortages. Moreover, the disturbance in the supply chain of raw materials also resulted in a delay in the manufacturing of VRF systems.

Further, the demand for systems was dropped due to the closure of commercial buildings and offices. Most offices shifted to the work from home scenario amid pandemic, which, in turn, declined the need for office spaces and their occupancy rates. Currently, the office occupancy rates have increased in line as compared to 2020. This is due to the decreasing social restrictions and reduced transmission risk thus leading to the desire of companies to open offices, which will positively impact the demand for these systems in the near future.

Moreover, the water-cooled heat recovery VRF systems market share in Australia and New Zealand is expected to recover with the expected increase in demand for VRF systems, as people’s disposable income is gradually growing.

Corporate Offices Are the Largest Application Category in the Industry

The corporate offices have the largest share in the market, on the basis of application. VRF systems ensure the use of energy to cool or heat corporate offices that are already occupied. Due to their ability to maintain temperature, these systems are highly preferred in offices.

The construction of offices and buildings in urban areas has been increasing steady, attributing to the growing population in major cities. Moreover, there are large-scale office projects in the construction pipeline, which indicates that building developers remain poised to take advantage of a recovery in office demand. This further leads to the opening-up of more corporate spaces for the financial services, insurance, banking, information technology, retail, and other sectors, which, in turn, expand the economies of these countries.

Market Outlook

• The market growth is promising, as manufacturing and volume demand for VRF systems are expected to grow in the coming years. The existing manufacturing capacity may have to increase significantly, which brings opportunities for investors who want to invest in manufacturing platforms to gain scale in Australia and New Zealand.
• Moreover, due to the increasing deployment of these HVAC systems in high-rise buildings on account of the flexibility and low-utility-cost benefits, players in the heat recovery VRF systems industry in Australia and New Zealand will get lucrative growth opportunities in the coming years.

Healthcare Is the Fastest-Growing Application Category in the Industry

The healthcare category is expected to witness the fastest growth, based on application, during the forecast period in the water-cooled heat recovery VRF systems market in Australia and New Zealand. This can be attributed to the increasing population and the rising need to improve healthcare facilities in Australia and New Zealand.

For instance, according to the Australian Bureau of Statistics, in June 2021, Australia's population grew by 46,000 people (0.2%) as compared to the previous year. This shows there is an annual increase in the overall population of Australia. Since the population is increasing, the need for medical services is rising, thus facilitating the demand for heat recovery VRF systems.

Moreover, the development of hospitals in these countries is also an important factor for the rapid market growth. The VRF systems can also be used for reducing energy consumption, and have a long life and high performance, thus these are widely accepted in hospitals.

Key Players in Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Are:

• Daikin Industries Ltd.
• Mitsubishi Electric Corporation
• LG Electronics Inc.
• Samsung Electronics Co. Ltd.
• Panasonic Corporation
• Toshiba Corporation
• Hitachi Ltd.

Market Size Breakdown by Segment

This report offers comprehensive market segmentation analysis along with market estimation for the period 2015–2030.

Based on Application

• Corporate Offices      
• Healthcare
• Hospitality

Geographical Analysis

• Australia
• New Zealand