This article is from the Australian Property Journal archive
LEGAL eagle Clayton Utz is searching for a new nest in the national capital and could land in one of ISPT’s office buildings.
The firm is on the hunt for a new long-term home, having engaged tenant representative LPC.
Clayton Utz is looking at an initial 10-year lease term with options, with a commencement date from February 2026. Subject to final space planning an area of circa 2,300 sqm is required, with the ability to expand and contract by 25% prior to the lease commencement.
Clayton Utz is currently located at Centuria Capital’s NewActon Nishi, at 2 Phillip Law Street in Canberra. However the firm is unable to expand its footprint because the building is almost fully occupied with only 320 sqm of space available.
Industry sources told Australian Property Journal, that although Canberra’s vacancy rates have increased, it remains lower than the historical average and there are only a few offices in the Civic precinct that can accommodate Clayton Utz and fit the requirement.
Sources said the firm will need to “downgrade” to a Four or Five-Star NABERS rating office because Centuria’s 2 Phillip Law Street is the only CBD building with a Six-Star NABERS rating.
Currently only two buildings in the CBD boast a Five-Star NABERS rating, 18 Marcus Clarke Street and Pathway Place at 7 London Circuit, both owned by ISPT and are under refurbishment.
18 Marcus Clarke St Canberra
“I would say Marcus Clarke is the frontrunner, because it has floorplates of 2,400 sqm, therefore Clayton Utz can accommodate the entire firm on the one floor. The average floorplates at Nishi is 1,900 sqm.
“The alternative is to have the firm occupy two floors at Pathway Place. Either way ISPT owns both properties, so Clayton Utz’s options to negotiate with different landlords is limited,” sources said.
Meanwhile recent tenants commitments at Pathway Place by the Australian Maritime Safety Authority and Civil Aviation Safety Authority for 6,500 sqm and 8,500 sqm respectively, were struck at net face rent of $540 per sqm and incentives of 30%.
Pathway Place
According to Knight Frank data, the Civic precinct has a vacancy rate of 7.9% in its A-grade market at the beginning of 2024. Average gross face rents were $560 per sqm, while prime net face rents averaged $446 per sqm.
Prime incentives were at an all-time high of 26.5% but it is much lower than the Brisbane, Sydney and Melbourne CBDs.
Canberra incentives rates remain stable and is the lowest in the eastern seaboard, compared to Brisbane (39%), Sydney (36%) and Melbourne (47%).
But JLL predicts the office vacancy rate in the city will trend upwards over 2024 as nearly 73,000 sqm of new office developments are completed.
CBRE estimates 106,119 sqm of space will come online, which would be the second largest annual total in the last 10 years.
Gross rental rates and incentives both remained unchanged in the early running of this year, according to CBRE.
