Federal Budget extension to depreciating assets
The Treasurer delivered the Federal Budget on Tuesday 11 May 2021.
Temporary full expensing of depreciating assets will be extended for an additional 12 months until 30 June 2023, allowing businesses to deduct the full cost of eligible depreciable assets acquired from 6 October 2020 and first used or installed ready for use by 30 June 2023.
- Owners should be preparing detailed listing of depreciating assets as part of the tender process thus capturing more detail and potentially more write offs at the time of completion. A detailed analysis of variations that may have happened should pick up the rest of the write offs at completion of the project.
- There is opportunity to bring “forward” capital projects for refurbishments and upgrades.
- Any projects that are on the drawing board at this time (for investment not trading stock) and potentially due for completion by June 23 should capture the potential write off amounts for their feasibility calculations. The cash flow benefit will significantly increase as a result of the write offs. Continue reading
Property Sector Spotlight : Industrial & Logistics
The industrial & logistics property sector became the hot favourite in 2020, outperforming all other property types.
The rise of e-commerce has driven major brands to expand their footprint and therefore leasing activity. Vacancy rates are at all-time lows and major development work is underway to meet demand. Several AREITS are continuing their growth in this asset class and Transaction volumes were up to $3.5 billion in 2020, from $2.3 billion in 2019 – as recently reported.
So, what makes the sector tick? Here are some attributes and advantages of the sector from our perspective.
Construction and development advantages
- Over time construction costs in the sector have been less susceptible to escalation than other asset types. This stability provides greater confidence to Developers when planning their next project.
- The speed of construction enables Developers to receive a return on their investment earlier than most other forms of development.
- Tried and tested construction techniques in the sector generally lead to less variations than other forms of construction.
- There are also tax depreciation benefits available to developers / investors upon project completion. Continue reading
