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News release


Canberra’s sub-500 sqm office leasing market gains traction

Stimulated by recent moves from Alzheimer’s Australia, Vivid Chartered Accountants and more

Activity at the sub-500 square metre end of Canberra's office leasing market has gained traction in recent months, as a renewed confidence is starting to be felt in the territory's commercial property sector.

A number of recent deals completed by JLL Senior Leasing Executive, Office Leasing – ACT, Nathan Dunn, demonstrate that tenants are willing to enter into new leases and take advantage of the opportunities available, stimulated in part by a renewed confidence in the market due to the 2015/16 Federal Budget.

Mr Dunn said, "Savvy tenants are acutely aware of current market conditions and believe that there has been no better time to move. Not only are they taking advantage of the good quality space available in the market, but they are also benefiting from the competitive rents and incentives offered by landlords."

Mr Dunn has completed a number of deals recently for tenants looking to upgrade their space, including Alzheimer's Australia, who leased 254sqm of space at 42 Macquarie Street, Barton for five years from Australian Medical Association. Vivid Chartered Accountants has leased 326sqm of space at 10 Rudd Street in the city for five years from STRADA Office Fund.

Three new players have even entered the Canberra office market, making long-term commitments to the nation's capital. Fresenius Medical Care Australia Pty Ltd has leased 480sqm of commercial office/medical space for seven years from The John James Foundation Limited, at 173 Strickland Crescent in Deakin. Gym operator By Design Health and Fitness has leased 207sqm of commercial space at 50 Eastlake Parade, Kingston for five years, from CIC Australia Limited. The Salvation Army Employment Plus has also committed to 220 sqm of commercial office space at 10 Moore Street in the city, on a three year term from Quintessential Equity.

Mr Dunn commented that some tenants are investing in space larger than what they currently require due to a potential expansion in the future. "Tenants are willing to initially commit to space that, although in the first instance is surplus to their needs, will allow for long-term growth. This approach reflects a sense of optimism in the sector."

While vacancy rates are expected to remain elevated in the short-term, JLL Research forecasts that vacancy has peaked and is projected to decline over 2015. Mr Dunn said that while the vacancy rate means abundant space is available, well-presented assets were still highly sought-after by tenants. "10 Rudd Street, for example, is a quality boutique office building in the heart of the Canberra CBD, and is constantly attracting high-calibre tenants due its unique mix of amenities, location and value. Additionally, tenant attraction to areas such as Braddon and Kingston Foreshore has been and will remain strong in the future."

JLL Managing Director – ACT, Andrew Balzanelli, "The increase in recent leasing activity in Canberra's sub-500sqm office market gives us reason to believe that confidence is returning, as seen from the volume of transactions. The recent Federal Budget was positive news for the anticipated level of activity in Canberra's commercial property market and we look forward to seeing this in its full effect."

JLL Research figures show the Canberra office market recorded positive net absorption of 3,900 square metres in 1Q15, the first positive result since 1Q14, after three consecutive quarters of negative absorption in 2014.