Tax reform needed to address office vacancy

Tax reform needed to address office vacancyOffice vacancy in the Adelaide CBD commercial office market has posted a slight decrease over the last six months, largely due to withdrawals. The Property Council of Australia’s latest biannual Office Market Report released today reveals vacancy in the Adelaide CBD dipped from 13.8 per cent to 13.5 per cent in the six months to January 2015. Vacancy also decreased in the Adelaide fringe market, from 9.9 per cent to 8.3 per cent over the same period. South Australian Executive Director of the Property Council of Australia Daniel Gannon said that tax reform was required to stimulate Adelaide’s office market. “While these headline figures might suggest Adelaide’s office market is heading in the right direction, widespread tax reform will ensure these figures are even better going forward,” said Mr Gannon. “The Adelaide CBD office vacancy rate has decreased for the first time since July 2012; however, this drop has been mainly due to withdrawals. “In the CBD market, vacancy climbed in all grades except Premium and B-grade, where withdrawals caused a drop in the six months to January 2015. “Future space set to come online in 2015 – 48,193sqm in total – could exacerbate these high vacancy rates if demand for office space does not return. “The Adelaide fringe market saw an increase in A- and D-grade stock, while B- and C-grade markets decreased. “Staggeringly, Adelaide’s net CBD demand is below its historical average while Sydney’s CBD demand in the six months to January 2015 is more than double its historical average. “These figures come shortly after January’s ANZ/Property Council Survey that showed South Australian property investors remain jittery about the state’s economic prospects. “South Australia’s eight per cent reduction in confidence levels was the worst result of all states across the nation.” Mr Gannon reiterated the Property Council’s calls for the State Government to reform South Australia’s tax system in an effort to stimulate the property market and create jobs. “The property and development sector wants to say goodbye to business as usual – and we’d encourage the State Government to do the same,” Mr Gannon said.”We need to become a ‘yes’ industry; but to do so we need the right business conditions, and that starts with tax reform.”