This article is from the Australian Property Journal archive
WITH no new Canberra office supply in the pipeline after 2017 over the medium term, the focus will turn to revitalising C and D-grade properties.
The Property Council’s Office Market Report showed the nation’s capital recorded the second largest vacancy decrease in the country, from 14.6% to 13.0% in the six months to July.
The Civic precinct’s vacancy rate decreased from 11.0 to 10.3% in that period.
ACT executive director, Merlin Kong said the decrease was largely driven by a combination of positive demand and withdrawals, which saw A-grade vacancy decrease from 13.0% to 9.9%, and B-grade vacancy decrease from 10.3 to 8.6%.
“Although A and B grade office space vacancy has decreased, and C and D grades have not fared as well, with vacancy increasing from 19.1% to 19.6% and 23.9 to 24.6% respectively,” Kong said. “What we are seeing here is the market in action, with clear preference for higher grade office space over lower grades.
“It is imperative that we get the tax and planning levers right to renew tired parts of our city.
“The ACT property industry is eager to work with Government to get this right,” he added.
Kong said that with competitive occupancy costs, low rental volatility, and one of the newest office stocks in the country it was not a surprise that Canberra recorded a higher net demand level compared to the historical average.
“However, even with higher than average demand, it is concerning that the report noted there is no new office space in the pipeline after 2017 over the medium term,” Kong concluded.
Australian Property Journal
