Could Canberra be the world’s best knowledge city?

As cities around the world look for their unique selling proposition, Canberra’s office market is laying the foundations for a world-class knowledge city, says the Property Council’s ACT divisional president George D. Katheklakis.

After iron ore and coal, Australia’s key export industry is already knowledge, contributing $20.3 billion to the national economy in 2016.

And as the nature of work evolves, roughly half of the jobs in developed economies will no longer exist by 2030. At the city scale, there will be winners and losers – and those winners will be the cities able to expand their technology-driven and knowledge-based economies.

A knowledge city may evoke Silicon Valley, high-tech start-ups and digital natives, but that is just part of the story. A knowledge city is not just technologically-dynamic, but evolves through innovation across a range of industries.

Australia’s first Knowledge City Index, published in August, found that Canberra topped the national league table of 25 cities, something that doesn’t surprise Katheklakis.

“Around 10 per cent of Australia’s R&D comes out of Canberra. It’s a technologically-astute centre with some of the nation’s brightest minds, but it tends to fly under the radar,” the managing director of Canberra developer KDN Group says.

According to the Knowledge City Index, Canberra ranks top in five out of six indicators (knowledge capacity, knowledge mobility, digital access, knowledge industries and income), and only falls behind on ‘smart work’, or teleworking. “We don’t need to do a lot of teleworking because everything is 15 minutes away,” Katheklakis says.

He says a lot of companies are looking to establish centres of excellence in Australia, and are surprised to discover that Canberra already has everything they need, from knowledge workers to affordable office space.

“Canberra’s infrastructure is not just the built form, but the planning regime that supports it, and enables it to function,” Katheklakis says.

“Decentralisation means that jobs and activity are spread around the city, minimising congestion, supporting productivity and ensuring everyone has a good quality of life.”

Katheklakis points to the “unique features” of the Canberra office market that fosters this blossoming knowledge economy.

“It’s the third largest office market in Australia, with 2.3 million sqm of office space. It’s also the least volatile commercial office market with the lowest occupancy costs. It has a very stable rental range, and that goes all the way from A to C Grade,” he says.

“Sydney is 2.3 times our average when it comes to gross effective rents. Melbourne is 1.4 times. Even Parramatta is 15 per cent more expensive than the nation’s capital.

“We have the newest average age of office stock in the country. Forty-four per cent of Canberra’s office stock is 10 years old or younger.”

In comparison just 17 per cent of Sydney’s stock is within this age cohort.

The Commonwealth is the single largest occupier in Canberra, which Katheklakis says drives a strategic approach to portfolio management.

“The Commonwealth is always in a good position to negotiate, which means we maintain a very stable office market.”

And then there are the benefits of knowledge clusters, with the “spill-over” into other industries as smart people “bump into each other”.

Canberra has the nation’s top-ranking university, a wealth of cultural institutions, the brightest policy brains and world-leading scientists at the CSIRO.

“It’s a collaborative city. You can mobilise intellectual capital far quicker in Canberra than you can anywhere else in Australia.”

Katheklakis says the city’s main challenge is to market itself better as a knowledge centre, and for the rest of Australia to recognise its potential for the nation.

“The city is just over 100 years old, and always gets a bit of knocking, but we have a national opportunity to create a centre of excellence in Canberra that brings together highly-skilled knowledge workers, R&D and policy in a stable environment.

“It could be a model for knowledge cities around the world,” Katheklakis concludes.