Canberra’s Office Market records lowest vacancy in 14 years


The ACT has recorded its lowest office vacancy rate since 2008, with demand for office space more than double the historical average for the nation’s capital.

The Property Council of Australia’s latest Office Market Report released today, revealed the ACT now has the second lowest office vacancy rate of all the capital cities.

ACT Executive Director of the Property Council of Australia Adina Cirson said the results are pleasing.

“Over the last six months to February 2022, Canberra’s overall vacancy rate dropped from 7.7 per cent, to 6.2 per cent, which is almost half the average vacancy rate nationally,” Ms Cirson said.

"The results highlight the continued tightening and resilience of the ACT office market – and sends an incredibly positive signal to those looking to invest in the nation’s capital. 

“The Commonwealth employment base and long term tenancies which continue to be sought in Canberra are no doubt helping drive positive demand for office space.

“Of particular note is the demand for premium office product, with Canberra prime vacancy the lowest of all the capitals at 2.4 per cent. 

“Even in the older stock, where vacancy rates have been high and stagnant in recent years, there are now some signs of movement, with a reduction in vacancy rates in C & D grade office space. 

“Whilst we have more supply of offices in the pipeline – more than half of the new stock coming into the market in 2022 is already pre-committed, which means tenants have already been found.

“It’s just so pleasing to see the Canberra market in such a strong position, given the last two years of the pandemic,” Ms Cirson added.

Office vacancies are calculated on whether a lease is in place for office space, not whether the tenant’s employees are occupying the space or working from home.

Media contact: Adina Cirson | 0429 579 972 | [email protected]

 

Office Market Report January 2022

Analysis – Canberra market

Headline comments:

  • Canberra vacancy decreased over the six months to January 2022
  • All grades recorded positive demand and decreases in vacancy
  • There is a significant amount of space in the pipeline due to be completed in 2022

Vacancy analysis:

  • Vacancy decreased from 7.7 percent to 6.2 percent
  • This was due to 33,164sqm of net absorption and 16,085sqm of withdrawals
  • Supply additions totalled 13,731sqm
  • Civic’s vacancy rate decreased from 8.5 percent to 6.1 percent due to 17,646sqm of net absorption
  • Vacancy in the Non Civic market decreased from 7.4 percent to 6.2 percent due to 15,518sqm of net absorption and 3,941sqm of withdrawals

Future supply:

  • A total of 116,235sqm of new space is due to enter the market in 2022
  • This will be followed by 26,414sqm in 2023
  • 8,500sqm is due to come online from 2024 onwards
  • 217,485sqm of space is mooted

 

Key market indicators, Canberra (aggregate)