Key callouts for the commercial property market in the Victorian state budget
With healthcare and the recovery from the pandemic a key focus of today’s Victorian 2022/23 budget, less was explicitly directed at commercial property.
Nonetheless, many of the announcements will affect the commercial property sector because commercial property is central to the economy and how Australians do business.
Boosting health care a key theme
A key theme from the budget is investing in health care and emergency response.
Key initiatives under the umbrella include initiatives to increase hospital and emergency services capacity, such as $900 million to build a new tertiary Melton Hospital, $500 million to deliver the Barwon Women’s and Children’s Hospital, $333 million to increase capacity for emergency dispatch and response, a $300 million boost to the Regional Health Infrastructure Fund, and $236 million to expand emergency departments at Casey and Merribee Mercy hospitals.
These initiatives won’t directly affect commercial properties since they are spending on public health infrastructure and services.
However, the increased public health capacity could provide a boost to support services such as pathology or medical imaging, which could boost demand for office and industrial assets that can support these types of services.
Infrastructure a focus again
Infrastructure was again a theme in this year’s budget, continuing the Victorian government’s “Big Build”. Much of the new spending was focused on public transport, including $265 million for upgrades to trains and trams, $109 million for bus services, and improvements to regional and suburban train stations.
Regionally, $248 million was committed to upgrade Victoria’s regional rail network, which will support freight rail as well as passenger.
These ongoing investments in infrastructure could increase the value of industrial and commercial property within these logistics networks that will benefit from improved connectivity.
Expanded childcare receives small additional boosts
Universal childcare for three and four-year olds continued to be a theme in the budget again this year.
This year’s budget includes additional spending to support the delivery of 15 hours of kindergarten for four-year-olds.
It also includes extra targeted initiatives to help certain groups, such as culturally and linguistically diverse or those from refugee and asylum seeker backgrounds.
These measures will strengthen the appeal of investment in the childcare sector.
Some support for the creative and major events industries
The 2022/23 budget expanded last year’s “Creative State Strategy”.
This initiative provides a variety of small programs; key among these this year are additional funding for the Arts Precinct, and $17 million to fund theatre repairs and arts precinct planning.
These programs could boost values for retail assets in surrounding areas that benefit from the upgraded amenities.