ACT Executive Director, Adina Cirson has said the Property Council of Australia’s latest Office Market Report has recorded the lowest vacancy rate since 2012, with a further reduction recorded in the last six months as a result of positive demand in the Canberra commercial leasing sector.
“Over the last six months to January 2020, Canberra’s overall vacancy rate decreased to 10.3 per cent from 11.1 per cent – down from 13.3 per cent recorded two years ago, highlighting a continued tightening in the market,” Ms Cirson said.
“Demand for office space is second behind Perth when compared with all other Australian capital cities, with the hottest properties being prime office product, highlighting the private sector demand for office environments that assist in staff retention by creating attractive workplaces.
“A Grade vacancy has remained fairly steady at 6.9 percent, but B Grade fell significantly – dropping from 14.1 per cent to 12.3 percent (the biggest downward shift since July 2013), with the market also reporting increased inquiries for ‘suite product’. C and D Grade stock are at their lowest levels since 2007 and 2010 respectively.
“The vacancy rate in Civic however has remained reasonably high at 12 percent, bucked by a further reduction in vacancy in the non civic market down to 9.6 percent. This is in line with a national trend for non CBD markets recording vacancy decreases. vacancy in areas like Barton is as low as 6.2 percent.
“We have also seen a shrinking market – really since January 2015, so withdrawal of stock also clearly helps our vacancy rates, meaning the market is primed to realise adaptive re-use opportunities in the C & D Grade stock, with a positive trend of refurbished stock entering the market,” Ms Cirson said.
“Further to this, and with over 50 per cent of the ACT office market tenanted by the Commonwealth, the market is keenly watching the impact of the Prime Minister’s most wide reaching Machinery of Government changes in recent years, with the change up and running from last weekend – placing the commonwealth tenancies on the market watch list this year,” Ms Cirson concluded.
