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News release

Canberra

The Department of Employment enters into 8-year lease extension from 2017 in Canberra

Commitment to approximately 15,400sqm space represents continued positive momentum in office leasing market


The Department of Employment has entered into an 8-year lease extension from its current 2017 lease expiry on its current premises in Canberra, as increased positive momentum remains evident in the city’s office leasing market. 

The lease extension of the circa 15,400sqm of A Grade office accommodation within 10 and 12 Mort Street is commencing March 2017. The Department of Employment is currently occupying both of the separate, interconnecting A-grade office buildings, located in Canberra’s city centre. The transaction follows the re-structure of the Department of Education, Employment and Workplace Relations (DEEWR) into the Department of Education and Training and the Department of Employment.

JLL Managing Director – ACT Andrew Balzanelli worked with the Landlord, ASX listed A-REIT Growthpoint Properties Australia, to negotiate the deal. 

Mr Balzanelli said, “This significant transaction represents confidence in Canberra and in the outlook for its commercial property market. The continued investment in 10 and 12 Mort Street by Growthpoint Properties ensures it is well positioned to cater to the Department’s needs for a further 10 years, offering large floor plates, convenient access to amenities and an excellent location in the city centre.”

Growthpoint Properties Australia Head of Property, Michael Green, commented, “Growthpoint is very pleased that the Commonwealth Government of Australia is remaining as a long-term tenant of the Property. The Property has been an excellent investment for Growthpoint who acquired the property in August 2012 for $55.8 million at an initial yield of 10.28%. We are pleased to have secured the long-term income of the Property and increased the value of the Property to $85 million as at 30 June 2015 for the benefit of Growthpoint’s security holders.”

According to JLL Research,​ the Canberra office market recorded a second successive quarter of positive net absorption (3,800 sqm) in 2Q15 with vacancy tightening to 15.3%. This was mainly driven by the prime cohort of the market with 15,600 sqm of absorption being recorded while secondary space recorded a reduction of 11,700 sqm. 

Government agencies accounted for 65% of all major occupier moves upwards of 1,000 sqm over 2Q15. The largest move was the consolidation of Shared Services (9,300 sqm) from a number of locations into Garema Court, 140-180 City Walk, Civic. The Australian Electoral Commission also consolidated with the lease of 5,000sqm of space at 50 Marcus Clarke Street.

Mr Balzanelli said the first six months of 2015 had been positive for Canberra’s office leasing market. “We have seen the return of a positive sentiment from both sides of the leasing equation – the owners and the tenants. A marked improvement in leasing enquiries, particularly in the sub-1,000 sqm market, has also been evident, mostly driven by organisations involved in outsourcing contracts from the Commonwealth such as recruitment, IT and security and defence industries.

“The withdrawal of sub-lease space by Government departments was also clear, with sub-lease vacancy reducing from 1.7% to 1.1% of total stock over the second quarter of 2015.”