Parking tax drives out tenants Author: Ben Schneiders and Marc Pallisco Date: 28/03/2007 Publication: The Age
THE State Government's controversial car-parking levy is partly to blame for higher vacancies along St Kilda Road, according to a Property Council submission.
"Feedback from tenants relocating out of the precinct suggests the costs of the levy is part of the decision-making process," Property Council executive director Jennifer Cunich said in the submission.
"While this may redistribute congestion around wider Melbourne, increased office vacancy in St Kilda Road could result in the precinct losing its vitality as a business district."
Ms Cunich's submission was in response to a review of the administration of the levy, which was introduced in January last year. It was doubled to $800 on long-term car spaces on January 1 this year.
She said the labour used by car park operators to keep records on the levy was proving "costly and wasteful".
"The cumulative effect of this gross inefficiency across the levy zone would equate to hundreds of thousands of dollars a year - resources that could contribute to Melbourne's economy in more productive ways."
Submissions closed on the review last month, with a report set to go to Treasurer John Brumby later this week.
The Property Council of Australia Office Market Report, released last month, found vacancy rates in St Kilda Road had worsened in the December half-year to 10.4 per cent, up from 9.4 per cent previously.
Ms Cunich wants the levy scrapped, although the Government has said it will keep it.
Agents say the recent doubling of the levy and rising land values and building costs are adding pressure to rents in Melbourne's eastern suburbs.
Business expansion from existing suburban tenants and a shortage of new or refurbished office buildings are expected to push average suburban rents past $300 a square metre before the year's end.
"Land values in Hawthorn had risen from $1600 per square metre to $2200 per square metre, or more than 37 per cent, over the last two years," said Colliers International suburban office chief executive Rob Joyes.
He said the growing list of suburban tenants needing more space was giving developers confidence. Mr Joyes said the doubling of the CBD parking levy to $800 was also driving tenants out. "The levy is a direct tax to the tenants' bottom line and, in some cases, will tip the balance in favour of the suburbs," Mr Joyes said.
KEY POINTS
? The Property Council says the car park levy is one reason for tenants leaving St Kilda Road.
? The council wants the Government to scrap the levy, but the state says it will not budge.