Canberra office enquiry spikes

According to Colliers International Research, enquiry is up 309 percent on last quarter.

Year-to-date, enquiry for office space across major Australia markets remains strong for 2017, despite some tightening and a declining vacancy rate.

According to Colliers International’s latest Office Demand Index, Canberra real estate the first half of 2017 saw majority of enquiries (74 percent) for office space less than 500sqm. Enquiry for 500sqm has declined quarter-on-quarter.

Conversely, enquiry for office space between 1,000 and 3,000sqm more than doubled Q1 to Q2 2017, and there was no demand for space over 3,000sqm in Q1 compared to Q2 where 66 percent was for space more than 3,000sqm. Additionally, last quarter saw a spike in total number of enquiries at 309 percent with 50,180sqm of demand recorded.

Michael Ceacis, Director at Colliers International said, “There are two major factors that influencing the increased demand for quality office accommodation, especially in Canberra’s CBD and Parliamentary Triangle. One is the growth of the private sector due to Commonwealth Government outsourcing. The other is tenants realising the benefits of moving into better quality space, such as staff having better access to amenities, better space efficiency and reduced operational costs”.

Colliers International transacted 16 deals in Canberra for the first half of 2017, totalling more than 32,000sqm. The three largest transactions were for more than 3,000sqm of office space, already surpassing 2016 figures where only two deals transacted for over 3,000sqm for the total year.

“Tenants are considering their options early due to foreseeable increases in rental rates for A-Grade accommodation in the CBD and Parliamentary Triangle and locking in longer term leases now.

“In the second half of the year we expect to see more than 100,000sqm of office space to be transacted. This result will make it one of the largest uptake of office accommodation that we’ve seen for years,” said Michael.

“In the short to medium term, we expect the market to tighten due to lack of new stock.

“We expect the first wave of new stock to be available mid-2019 with the anticipated completion of the circa 15,000sqm office tower, Civic Quarter in Canberra’s CBD being developed by Amalgamated Property Group. Further new supply is expected mid-2020.

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