Canberra to see 34,700sqm of new office completions by year-end

In Q1, 50,000sqm of new office stock was completed.

JLL forecasts headline office vacancy in Canberra to continue to increase over the medium-term, reflecting ongoing occupier consolidation activity as the Australian public service continues to pursue improved occupational efficiency.

“Incentive growth is anticipated in line with elevated vacancy, which is likely to further inhibit effective rental growth. Further office completions are forecast over the next 12-months, with an additional 34,700 sq.m. expected to complete by the end of 2026,” the analyst noted.

Here’s more from JLL:

Canberra recorded negative net absorption of -54,400 sq.m. in Q1 2026, driven by large occupier consolidations (>1,000 sqm), bringing total net absorption over the last 12-months down to -80,300 sq.m.

As a result, the headline vacancy rate increased by 0.1 pps to 10.5%, up 1.3 pps year-on-year from 9.2% in Q1 2025.

Completions totalled 50,000 sq.m, while 246,000 sq.m. remains under construction with high pre-commitment

50,000 sq.m. of office stock completed in Canberra over the quarter, while 111,100 sq.m. was withdrawn for refurbishment, helping to offset vacancy.

Despite consolidation activity pushing up vacancy, there remains 246,000 sq.m. under construction supported by strong Commonwealth pre-commitment.

Prime gross effective rents increased 5.0% to AUD 373 per sq.m. p.a., with incentives unchanged

Prime gross effective rents increased 0.5% over the quarter to AUD 373 per sq.m. p.a., driven by a slight increase in prime gross face rents, while prime incentives remained unchanged. Canberra’s prime gross effective rent is 3.5% higher year-on-year, with growth constrained by a marginal uplift in average prime incentives, outstripping strong gross face rent growth.

One transaction totalling AUD 6.5 million was recorded in Canberra over the quarter. Prime yields softened by 25 basis points at the lower end, resulting in a midpoint yield of 7.25%, within a range of 6.50% to 8.00%.