Let’s take a look at what’s happened in the Canberra property market over the past six months in terms of office rent, vacancy and new supply.
Canberra’s office vacancy rate lifted to 10.7% in July 2025, up from 9.2% six months earlier, after several major developments added about 54,000 sqm of new space in the first half of the year. Even with this rise, Canberra still holds the lowest vacancy rate of any Australian capital, well below the national CBD average of 14.3%.
Most of the increase was in Civic, where prime vacancy reached 16.2% following the completion of One City Hill and other new A-grade buildings. The Parliamentary precinct remained steady, with prime vacancy at 1.6%. In the secondary market, vacancy sits at 9.6% in Civic and 2.7% in the Parliamentary precinct, showing a clear gap between newer and older stock. Overall net absorption remained positive but moderate, consistent with longer-term trends, as tenants continued to upgrade into higher-quality space while older assets faced slower backfill.
For tenants, this environment represents a window of improved leasing conditions, particularly in Civic, where elevated vacancy and new supply are increasing flexibility, negotiation leverage, and access to recently completed prime-grade options.
Canberra’s office market is seeing a surge in new supply, with around 70,000 sqm of space scheduled for completion in 2025 - about 50% above the long-term average. Key additions so far include One City Hill (34,086 sqm) and 9-11 Molonglo Drive (19,703 sqm), both delivered in the first half of the year. These projects signal the start of a new phase of prime-grade development in the capital.
Looking ahead, a further 90,000 sqm of office space is expected to be completed between late 2025 and 2027, including:
For tenants, this upcoming delivery phase presents a period of enhanced opportunity. Elevated vacancy in Civic, combined with an influx of new and refurbished stock, is expected to increase competition among landlords, improving choice, flexibility, and leasing terms for tenants seeking to upgrade or consolidate space.
In Canberra’s Civic office market, rental conditions remained steady through the first half of 2025. Prime gross face rents rose slightly to $582 sqm, and secondary rents lifted to $479 sqm. Net effective rents moved to $322 sqm for prime and $221 sqm for secondary space, with incentives unchanged at 26.5% and 29.2%, respectively.
A similar trend was seen across the non-Civic precincts, where prime gross face rents increased to $523 sqm and secondary rents to $441 sqm. Net effective rents edged up to $301 sqm and $223 sqm, while incentives held steady at 24.9% and 27.1%.
Although face rents have lifted, the rise mainly reflects the addition of newer, higher-quality stock rather than stronger tenant demand. For occupiers, leasing conditions remain favourable, with elevated incentives and greater competition among landlords continuing to support flexible lease outcomes.
The Commonwealth Government is continuing to consolidate its office footprint, with agencies moving into modern, purpose-built hubs mainly across Barton and the Inner South. DFAT, for example, will bring 4,500 staff together in a new Barton headquarters by 2027, exiting several older Civic sites. Similar moves by departments such as Veterans’ Affairs reflect a broader shift toward green, energy-efficient buildings that meet government ESG commitments and NABERS standards.
These relocations are releasing older Civic stock back to the market, which may create value opportunities for private sector tenants as backfill space becomes available. However, competition for prime space in Barton remains strong, with vacancy below 2%. While hybrid work continues to influence space needs, the dominant trend remains one of consolidation and asset uplift rather than expansion.
Tenants continue to consolidate into higher-quality buildings, particularly in Barton and Forrest, where prime vacancy remains below 2%. ESG targets, NABERS minimums, and workplace experience are key factors driving moves into modern, energy-efficient assets. This shift has widened the gap between core and fringe precincts, as many older Civic buildings continue to face leasing challenges despite elevated incentives. The result is a more polarised market, with demand increasingly concentrated in a limited pool of efficient, contemporary offices.
Hybrid work remains the norm across Canberra, with most tenants adopting shared desking ratios and reduced in-office density. This is prompting a shift toward smaller, better-utilised footprints that prioritise collaboration zones over assigned workstations. Consolidation into fitted-out, efficient buildings, particularly near the Parliamentary Triangle is reducing overall demand for NLA, while increasing appetite for flexible layouts and adjoining space in strategic locations.
Incentives continue to average 25–30% across most precincts, with some secondary buildings offering even higher contributions. Turnkey fit-outs are now a standard tenant expectation, allowing occupiers to reduce capex and compress relocation timelines. Landlords are responding by delivering plug-and-play suites and offering capital packages upfront, particularly for long-term government and anchor tenants seeking minimal disruption. This remains a critical negotiation lever in 2025.
Tenant CS negotiates exclusively for tenants, securing sharper lease terms, real cost savings and hours back in your day. Put an expert in your corner so you can focus on what you do best.
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Let’s take a look at what’s happened in the Canberra property market over the past six months in terms of office rent, vacancy and new supply.
Canberra’s office vacancy rate lifted to 10.7% in July 2025, up from 9.2% six months earlier, after several major developments added about 54,000 sqm of new space in the first half of the year. Even with this rise, Canberra still holds the lowest vacancy rate of any Australian capital, well below the national CBD average of 14.3%.
Most of the increase was in Civic, where prime vacancy reached 16.2% following the completion of One City Hill and other new A-grade buildings. The Parliamentary precinct remained steady, with prime vacancy at 1.6%. In the secondary market, vacancy sits at 9.6% in Civic and 2.7% in the Parliamentary precinct, showing a clear gap between newer and older stock. Overall net absorption remained positive but moderate, consistent with longer-term trends, as tenants continued to upgrade into higher-quality space while older assets faced slower backfill.
For tenants, this environment represents a window of improved leasing conditions, particularly in Civic, where elevated vacancy and new supply are increasing flexibility, negotiation leverage, and access to recently completed prime-grade options.
Canberra’s office market is seeing a surge in new supply, with around 70,000 sqm of space scheduled for completion in 2025 - about 50% above the long-term average. Key additions so far include One City Hill (34,086 sqm) and 9-11 Molonglo Drive (19,703 sqm), both delivered in the first half of the year. These projects signal the start of a new phase of prime-grade development in the capital.
Looking ahead, a further 90,000 sqm of office space is expected to be completed between late 2025 and 2027, including:
For tenants, this upcoming delivery phase presents a period of enhanced opportunity. Elevated vacancy in Civic, combined with an influx of new and refurbished stock, is expected to increase competition among landlords, improving choice, flexibility, and leasing terms for tenants seeking to upgrade or consolidate space.
In Canberra’s Civic office market, rental conditions remained steady through the first half of 2025. Prime gross face rents rose slightly to $582 sqm, and secondary rents lifted to $479 sqm. Net effective rents moved to $322 sqm for prime and $221 sqm for secondary space, with incentives unchanged at 26.5% and 29.2%, respectively.
A similar trend was seen across the non-Civic precincts, where prime gross face rents increased to $523 sqm and secondary rents to $441 sqm. Net effective rents edged up to $301 sqm and $223 sqm, while incentives held steady at 24.9% and 27.1%.
Although face rents have lifted, the rise mainly reflects the addition of newer, higher-quality stock rather than stronger tenant demand. For occupiers, leasing conditions remain favourable, with elevated incentives and greater competition among landlords continuing to support flexible lease outcomes.
The Commonwealth Government is continuing to consolidate its office footprint, with agencies moving into modern, purpose-built hubs mainly across Barton and the Inner South. DFAT, for example, will bring 4,500 staff together in a new Barton headquarters by 2027, exiting several older Civic sites. Similar moves by departments such as Veterans’ Affairs reflect a broader shift toward green, energy-efficient buildings that meet government ESG commitments and NABERS standards.
These relocations are releasing older Civic stock back to the market, which may create value opportunities for private sector tenants as backfill space becomes available. However, competition for prime space in Barton remains strong, with vacancy below 2%. While hybrid work continues to influence space needs, the dominant trend remains one of consolidation and asset uplift rather than expansion.
Tenants continue to consolidate into higher-quality buildings, particularly in Barton and Forrest, where prime vacancy remains below 2%. ESG targets, NABERS minimums, and workplace experience are key factors driving moves into modern, energy-efficient assets. This shift has widened the gap between core and fringe precincts, as many older Civic buildings continue to face leasing challenges despite elevated incentives. The result is a more polarised market, with demand increasingly concentrated in a limited pool of efficient, contemporary offices.
Hybrid work remains the norm across Canberra, with most tenants adopting shared desking ratios and reduced in-office density. This is prompting a shift toward smaller, better-utilised footprints that prioritise collaboration zones over assigned workstations. Consolidation into fitted-out, efficient buildings, particularly near the Parliamentary Triangle is reducing overall demand for NLA, while increasing appetite for flexible layouts and adjoining space in strategic locations.
Incentives continue to average 25–30% across most precincts, with some secondary buildings offering even higher contributions. Turnkey fit-outs are now a standard tenant expectation, allowing occupiers to reduce capex and compress relocation timelines. Landlords are responding by delivering plug-and-play suites and offering capital packages upfront, particularly for long-term government and anchor tenants seeking minimal disruption. This remains a critical negotiation lever in 2025.
Tenant CS negotiates exclusively for tenants, securing sharper lease terms, real cost savings and hours back in your day. Put an expert in your corner so you can focus on what you do best.
We acknowledge the Traditional Custodians of the lands on which we work. Our offices are located on the land of the Gadigal peoples of the Eora Nation and the Wurundjeri peoples of the Kulin Nation. We acknowledge their continued connection and contribution to land, water and community, and pay our respects to Elders past and present.
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