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News release

Sydney

Impact of the 2009-10 Federal Budget on the commercial property industry


SYDNEY, 13 MAY 2009 – Stephen Conry, Head of Jones Lang LaSalle in Australia said, “One of the positives from the 2009 Federal Budget is that the major shocks to capital markets and adverse impacts on superannuation flows have been avoided, which means the impact on portfolio allocations to real estate is unlikely to be adverse.”
 
Mr Conry said while the significant government spending on infrastructure announced in the Budget has been welcome by industry, national and state projects needed to be progressed without delay.
 
“Time is of the essence for the much lauded and massive infrastructure investment where every day counts in terms of seeing economic impact from it.
 
“The 2009 Budget is clearly a huge deficit and there is some gambling on the likelihood of a short term economic turn around with some seemingly optimistic forecasts for return to growth and turnaround in corporate tax revenue. We hope this approach proves to be right as business sector confidence is deteriorating unabated and the impact on the commercial office sector is dramatic.
 
“I think next year’s budget will be more difficult to frame.  It will involve some harder calls with outcomes tougher to consume than this year’s budget.”
 
Mr Conry said the Federal Government continues to place emphasis and to provide financial support for environmental strategies in relation to commercial real estate.
 
“It is clear the government is pushing for greater transparency of the sustainability performance of office buildings and has announced measures to encourage greater take up of sustainability practices in the commercial property industry.
 
“Initiatives like the new Energy Efficiency Trust in the 2009-10 Budget and the $90m Green Building Fund announced in last year’s Budget are an opportunity for owners to upgrade the sustainability of their buildings with government subsidies.
 
“They should take advantage of these programs before the new proposed Mandatory Disclosure of Commercial Buildings Energy Efficiency is introduced, which will drive increased transparency in the market.
 
“This scheme will require disclosure of greenhouse performance of buildings over 2000 sqm upon lease or sale, which will show at a glance the poor performing assets in the industry,” Mr Conry said.
 
Environmental initiatives announced in the Federal Budget 2009-10 that relate to commercial property include:
 
• The Energy Efficiency Trust with $50 million in funding to support improvements in lighting, ventilation and air conditioning in buildings
• $3.7 million in 2009-10 to drive energy efficiency in commercial buildings and $5.3 million for residential buildings
• $1.5 million towards a national disclosure regime for commercial building energy efficiency at point of sale or lease
• Funding towards enhancing the Australian Built Environment Rating System (NABERS) and the development of new rating tools.
 
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