Canberra office vacancy rates improve
After a three year climb in empty office rates, Canberra has recorded a drop in vacancies over the last six months, although the nation’s capital has the third highest vacancy rate in the country.
The Property Council of Australia’s latest Office Market Report finds that office vacancies in Canberra decreased from 15.3 per cent to 14.9 per cent over the six months to January 2016.
“This decline in vacancies is largely due to withdrawal of stock from the market,” said the Property Council’s Acting ACT Executive Director, Mary Wood.
“Withdrawals can be due to a change in use of the building, renovations or demolition” she explained.
Canberra’s market recorded 57sqm of net absorption (new demand) and 17,872sqm of withdrawals over the period.
“However, with vacancy rates second only to Darwin and Perth, we’ll need a lot more withdrawals from the market to revive our CBD and town centres,” Ms Wood says.
“Empty office buildings have an impact on Canberra’s street level vibrancy – particularly in our CBD. High office vacancy rates should be the concern of all Canberrans wanting dynamic town centres.”
Detailed analysis of the market finds that vacancy of A Grade office stock decreased from 14.1 per cent to 13 per cent. B Grade vacancy also decreased from 10.7 per cent to 10.3 per cent.
In contrast, vacancy of C Grade increased from 18.7 per cent to 19.3 per cent, the highest on record. D Grade vacancy increased from 28.4 per cent to 30 per cent.
“These figures for secondary buildings underscore the challenges faced by Canberra. Many of our older office blocks in the CBD in particular are tired and run down, which is why we welcome the Government’s commitment to develop a City and Gateway Renewal Strategy in particular.
“In seeking to re-birth Northbourne Avenue and create a grand boulevard, and to catalyse the creation of some urban villages along the route, we need to look at what other cities are doing to renew their older stock. In Sydney, Melbourne and Brisbane, private investment dollars are working to convert secondary office buildings into apartments, hotels and senior’s housing developments.
“The Property Council looks forward to working with the ACT Government on a range of planning and tax changes to rehabilitate tired areas of our city and help us create exciting new places for Canberrans to live, work and play,” Ms Wood concludes.
Media contact: Mary Wood | M 0409 301 917 | E [email protected]
Key market indicators, Canberra (aggregate)