2024-03-18-莱坊-Canberra_Office_Market_March_2024_7页_1mb

Canberra Office Market Summary

• Vacancy Rate: Current vacancy rate is 8.3%, the lowest among major capital cities, with prime rates holding steady due to limited availability in precincts like Barton. Secondary vacancy dropped to its lowest level in a decade.

• Rental Growth: Steady annual rental growth, with A-grade net face rents increasing by 27.0% and secondary rents by 28.4%, driven by sustained demand from public administration and small private sector tenants. Overall yields softened by 86bps in the prime market.

• Market Drivers: High demand from government and private occupiers, particularly for smaller suites, contributing to low vacancy and stable market conditions, with no new supply added in 2023.

• Future Supply: Forecast additions of approximately 73,000 sqm office space by 2026, including developments like 15 Sydney Avenue Barton, which may increase competition but aim to provide prime office opportunities in tight markets.

• Investment Activity: 2023 saw investment worth A$90.4 million across three transactions, including sales with outcomes sometimes at a discount, though sentiment shifted with improving economic outlook.

• Overall Outlook: Canberra maintains the strongest demand in Australia's office market since 2020, with rental growth outpacing capital value declines, supported by a positive inflation and economic outlook.