Office Space Rentals May Be Affected By Government’s Bonus Tax
The improving office space rentals market may soon witness a standstill of sorts if a new tax proposed by the government comes into force. Analysts are predicting that the 50% bonus tax mooted by
During the recession, office space tenancy rates fell drastically along with rental values. Also, owing to lack of funds developers were hesitant to undertake new projects. Several ongoing projects were brought to a standstill as funds were scarce. This led to a shortage of new office spaces in the market. As demand is on the rise once more now with a huge chunk of vacant desk space being taken up in the last quarter of 2009, developers were optimistic that the shortage and fresh demand would combine to push up rent rates. In fact this expected outcome even prompted many developers to resume work on abandoned projects to take advantage of demand intensive conditions in the market.
However analysts have now predicted that this is probably not going to happen. For one
With this background, the government’s 50% tax which is proposed to be implemented on discretionary bonuses paid by banks will put an additional spanner in the works, they feel. This tax burden will subdue foreign investment in
