Canberra set to add 86,700sqm new office stock by year-end

Headline vacancy is forecast to climb over the next 12 months.

Canberra’s office market is expected to see headline vacancy increase over the next 12 months as continued public sector consolidations push government tenants to improve occupational efficiency. JLL anticipates that office completions will add an additional 86,700 square meters of space by the end of 2026, increasing available stock and likely prompting landlords to raise incentives.

According to a JLL report, despite the expected rise in vacancy, prime net effective rents are projected to remain resilient. In Q4 2025, prime rents increased 2.3% over the quarter to AUD 273 per square meter per annum, up 6.5% year-on-year, while incentives remained stable at 27.9%. Secondary rents were steady at AUD 171 per square meter per annum but down 2.5% year-on-year, with incentives unchanged at 29.1%, reflecting ongoing tenant demand for higher-quality space.

Current market conditions show that Canberra’s headline vacancy rose to 10.4% in Q4 2025 following negative net absorption of 19,700 square meters, marking the second consecutive quarter of rising vacancy - data from the JLL report revealed. Positive net absorption of 4,500 square meters in prime assets reduced prime vacancy by 0.3 percentage points to 8.3%, whereas secondary space saw around -24,300 square meters of net absorption, lifting vacancy by 3.3 percentage points to 14.8% as government tenants relocated into higher-quality offices.

According to JLL, Canberra also continues to lead Australia in office development activity, with 238,700 square meters under construction across nine projects, representing 10.6% of local stock and 29.6% of the national office construction pipeline. Approximately 70% of this under-construction space is pre-committed, demonstrating strong demand for new, high-quality office space. Despite comprising only 7.6% of national office stock, Canberra now accounts for the largest share of offices under construction among the 19 CBDs tracked by JLL.

Overall, while Canberra’s office market faces rising vacancy from ongoing consolidations and new completions, strong demand for prime space and a substantial pre-committed pipeline are expected to support rental growth and maintain market resilience.