Canberra vacancy rates tighten for A-grade office stock: HTW Commercial

2019 has seen vacancy rates continue to tighten for A-grade office stock in the nation’s capital, having fallen to 5% from 5.4% in the six months to July 2019 and having already decreased from 8.6% for the six months prior to that, according to the latest report from Herron Todd White.

The property valuation firm found, absorption of A-grade stock has continued to improve, primarily for property in close proximity to the CBD and predominantly by Commonwealth government departments.

While the supply level for premium office stock is currently tight, new stock coming on-line in 2020 and 2021 will relieve this pressure and potentially offset any significant rental growth experienced currently, especially in the premium sector.

Notable office development currently taking place within the CBD includes Amalgamated Property Group’s Civic Quarter, situated alongside the Northbourne Avenue development corridor with direct exposure to the light rail system. 

The report notes, "While there has been very strong interest in the above both government and corporate tenants alike, demand for office space certainly exists outside of the CBD."

"An example of a significant sale transaction is 16-18 Mort Street, Canberra City in June 2019 for $108.5 million. The property was constructed in 1992 and features a total of 14,506 square metre B-Grade office space."

"The continued popularity and growth of co-working spaces and buildings with shared facilities to satiate an ever growing mobile office population that demands more flexible spaces coupled with a move towards smarter more energy efficient buildings will see an increased proportion of current B-grade stock undergoing substantial refurbishment and modernization in order to stay competitive and garner local and offshore investment interest," it concluded.