The New Era of Strata Management: Technology, Talent and Transparency.

While the strata industry continues to grow, rising operating costs, increasing building complexity, staff shortages, compliance obligations and insurance challenges are placing unprecedented pressure on business performance.

The report analysed more than 200 strata businesses managing over 1.4 million lots and found that future success will be determined not by size alone, but by a business's ability to improve productivity, embrace technology, retain talented staff and strengthen client relationships.

For strata managers, the message is simple:

The industry is changing rapidly and businesses that fail to modernise their operations, technology and service model risk falling behind.

Perhaps the most significant finding in the report is what Macquarie describes as "The Great Compression." While:

• 77% of businesses increased revenue
• Revenue per lot increased 17%
• Base management fees increased 19%

Profitability continues to decline.
Key findings include:

• Net profit margins have fallen 42% since 2005.
• Median EBITDA has declined from 23% in 2022 to 19% in 2025.
• Only 59% of businesses increased profits despite strong revenue growth.

Many strata businesses are growing revenue but becoming less profitable.
Growth alone is no longer enough. Strata businesses must focus on operational efficiency,
productivity and scalable service delivery.

The report confirms that strata management remains a people-driven industry.

However, people costs are rising significantly:

• Salaries now consume 52% of revenue.
• Staff costs account for 68% of total expenses.
• Senior strata manager remuneration has increased to $125,252.
• Junior strata manager remuneration has increased by 46% since 2022.

The traditional approach of solving workload challenges by hiring more staff is becoming financially unsustainable.

Future growth will require:

• Better systems
• Better workflows
• Better automation
• Better access to information

The challenge is not replacing people. The challenge is enabling people to be more productive.

The report found:

• 24% of strata managers changed employers in 2025.
• Turnover remains well above the national average.
• Larger businesses experience the highest staff turnover.

High-performing businesses achieved:

• 83% staff retention
• Higher profitability
• Higher productivity
• Faster lot growth

When a strata manager leaves, businesses lose:

• Client relationships
• Building knowledge
• Operational knowledge
• Productivity

Staff retention is no longer an HR issue. It is a business performance issue.

The number one focus area identified by respondents was:

Improving Operational Efficiency (81%).

This ranked above:

• Staff retention
• Recruitment
• Pricing
• Insurance
• Acquisitions

Businesses are actively looking for ways to:

• Reduce administration
• Streamline workflows
• Improve productivity
• Scale without increasing headcount

The future belongs to businesses that can manage more buildings, more complexity and more clients without proportionally increasing staff costs.

The report shows significant growth in technology investment.

Key findings:

• Average technology tools increased from 4 to 5.1 per business.
• 69% of businesses are prioritising technology implementation.
• AI adoption now exceeds 80%.
• Larger firms are investing hundreds of thousands of dollars annually into technology platforms.

Technology is rapidly becoming a competitive differentiator.

The highest-performing businesses are investing heavily in:

• Workflow platforms
• Automation
• AI
• Data integration
• Client portals

Businesses relying on manual processes will struggle to compete.

Macquarie identifies AI as the next major evolution in strata management.

Potential applications include:

• Communication drafting
• Workflow automation
• Compliance monitoring
• Financial analysis
• Predictive maintenance
• Owner engagement

AI requires structured and reliable data. Businesses that have digitised building information and operational processes will gain the greatest advantage. Those with fragmented records and manual systems will struggle to benefit.

The report highlights growing industry focus on:

• Insurance transparency
• Risk management
• Governance
• Compliance

Many businesses are changing fee structures to create greater transparency around insurance services.

Insurance is no longer simply an annual renewal exercise. It is becoming a strategic component of building risk management.

Strata managers who can demonstrate strong governance, maintenance records and building information will be better positioned to support improved insurance outcomes.

One of the report's strongest messages is that strata remains a relationship-driven industry.

At the same time:

• Buildings are becoming larger and more complex.
• Owners are demanding greater transparency.
• Committees expect faster access to information.
• Regulatory obligations continue to increase.

Clients increasingly expect:

• Real-time information
• Transparency
• Faster response times
• Digital engagement

The traditional reactive service model is becoming harder to sustain.

Macquarie identified a group of high-performing businesses that significantly outperformed their peers. These businesses achieved:

• 26% EBITDA margins compared with 19% industry average.
• 12% growth in lots under management.
• Higher revenue per employee.
• Better staff retention.
• Lower salary costs as a percentage of revenue.

Most importantly:

They focus on People, Process and Platform.

These businesses are:

• Investing in technology.
• Retaining key staff.
• Improving productivity.
• Standardising workflows.
• Leveraging data.

Following the report, business leaders should ask:

1. How can we improve productivity without increasing headcount?
2. How can we reduce administrative burden on our strata managers?
3. How can technology help us improve client experience, governance and profitability?

Businesses that answer these questions successfully will be best positioned to thrive over the next decade.

The Macquarie 2026 Benchmarking Report is ultimately a call for transformation.
The industry's future leaders will not necessarily be the biggest businesses.
They will be the businesses that successfully combine:

People: Retaining and empowering talented staff.

Process: Creating efficient, scalable operations.

Platform: Leveraging technology, data and automation.

In an environment of rising costs, increasing complexity and growing client expectations, the most successful strata businesses will be those that embrace innovation while continuing to strengthen the relationships that remain at the heart of the strata industry.