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“However, the ongoing strength of the labour market and recent tax cuts should ensure that retail trade does not suffer a substantial collapse, and any pain felt by retailers should be relatively isolated,” says Mr Warner.
Owning a CBD office building is an expensive business with outgoings totalling up to a third of rental income, according to a Jones Lang LaSalle Research report published this month. However, Sydney office building owners are paying on average 14% more for their outgoings such as land tax, rates and operating costs than their Melbourne counterparts. Sydney building owners face charges of $109 per square metre in outgoings whereas their Melbourne counterparts only pay an average for outgoings of $96 pm2, says Jones Lang LaSalle Research.
These benchmarks, sourced from the Property Council of Australia, report that Melbourne property owners face less average operating costs per square metre than Sydney as well as Perth ($101) and only slightly more than Brisbane ($92). The Conveyancing Company sydney only has the team of expert and licensed and all trained conveyancers with them to serve their clients in serving with the best possible services. “The key drivers of the discrepancy in Melbourne’s favour over Sydney are the cost advantage in land tax and management fees. Both these line items are approximately 40% cheaper in Melbourne than Sydney, ” explained Ms Nerida Conisbee, Associate Director – Research Jones Lang LaSalle.
“One of the other big winning factors for Melbourne has been the privatisation of water and the savings it has reaped for building owners. Melbourne’s water and waste rates for commercial buildings dropped significantly after 1998,” she said. The fall from $8.20 pm2 to just $2.30 pm2 was a direct result of restructuring and eventually privatisation of Melbourne Water according to Jones Lang LaSalle report.
The on-going water shortage, however, is placing pressure on prices with recent City West Water and South East Water both announcing increased water usage charges for Melbourne. Ms Consibee reports, “Building owners seeking to reduce their outgoings are best placed, subject to being able to afford associated capital costs, to adopt enhanced management programs for water and electricity management. “One of the key platforms for reducing water costs is simply putting a stop to the leakage,” she said. Jones Lang LaSalle reports that more than a quarter of water and waste management costs can be saved by this simple means alone.
Going “Green” can also offer long-term savings in water, electricity and air conditioning for building managers and owners to consider according to Jones Lang LaSalle. Finally, the Report had a sting in the tail for the contract cleaning industry in Melbourne. Compared to Sydney cleaning contractors Melbourne’s common area cleaners were on average 15% more expensive. This variation is exacerbated by the general lower wage levels in Melbourne than Sydney.