South East Queensland commercial property owners will not receive an updated statutory land valuation in 2021 the Queensland Valuer-General Wally Kearnan announced in December last year. COVID-19 has been cited as a “major consideration” for the decision despite being only months since former Valuer-General Neil Bray hoeld commercial discussions with valuers on what the reductions would look like regarding COVID-19 impacts to the various property sectors.
Prior to Christmas the new Valuer-General announced that residential and commercial landowners in 25 rural local government areas largely unaffected by COVID-19 will receive new land valuations in March 2021.
Properties in local government areas which have been most affected by the pandemic such as the Brisbane, Gold Coast, Ipswich, Moreton, Logan and Sunshine Coast council areas will remain at their previous valuations.
In an article in the Courier Mail last week Savills Australia National Head of Advisory – Valuation & Advisory Neil Murphy slammed the decision and said “It will make us less competitive than the southern states which are reducing properties in value but in Queensland they are not giving owners the opportunity to be more competitive which would see more development.”
Mr Murphy added in the article “With REIT’s (real estate investment trusts) valuing every three months at least during COVID how can the Valuer-General not value for two years. It’s basically revenue protection. If you don’t value no one can object or appeal and everyone will be paying higher Council Rates and Land Tax.”
Valeo Property Group Head of Property Peter Laurent thinks the decision will place more strain on commercial property owners in particular office landlords and high street retail landlords who have been particularly adversely affected by Covid-19. The impact of lost rental income due to Covid-19 after having faced significant land revaluations and land tax and rate increases in recent years make this a particular hard pill to shallow for these landlords.
With the economic recovery being strong in 4Q 2020 and expected to continue in early 2021 now is a great time for these Landlords to reassess their asset strategy. Improvements to leasing marketing activities, resetting desired target tenant and tenancy mix strategies to meet changing market dynamics, capital improvements and smart savings in outgoings budgets are all proactive ways to actively improve asset performance.
Valeo Property Group is working with several clients to proactively reposition their assets in 2021 and welcomes asset owners to contact him to discuss further their options to proactively improve their assets leasing or management performance.
In a statement The Department of Resources said they will continue to monitor the market and a decision will be made on the 2022 statutory valuation program in the last quarter of 2021.
If you would like to discuss more about Commercial Real Estate please contact Peter Laurent – Head of Property for Valeo Property Group.