Canberra records positive office absorption for fourth straight quarter

Net absorption hit 6,700sqm in Q2.

According to a JLL report, Canberra experienced a net absorption of around 6,700 sqm in Q2 2025, marking the fourth consecutive positive quarter for Canberra. Additionally, positive net absorption was recorded for both prime (4,300 sqm) and secondary (2,400 sqm) markets.

“The 10-year average net absorption stands at 5,000 sqm, and the total net absorption over the last 12-months reached 37,800 sqm. These metrics indicate a sustained period of demand and leasing activity in the Canberra market during this period,” the report added.

Here’s more from JLL:

In Q2 2025, Canberra’s headline vacancy rate saw a slight reduction of 0.1 percentage points (pps) from the previous quarter dropping to 9.1%. The prime vacancy rate saw a fall of 0.3 pps to 7.8%. Conversely, the secondary vacancy rate increased by 0.4 pps, to 11.8%.

Sublease vacancy also experienced a rise, increasing by 0.2 pps, from 0.8% in the previous quarter to 1.0%. Overall, the trends indicate a stabilization in the headline vacancy rate alongside contrasting movements in the prime and secondary markets.

Prime and secondary rents show modest changes; yields unchanged while incentives rise

Prime net effective rents reduced by 0.8% over the quarter to AUD 262 per square meter p.a., an increase of 2.3% year-on-year, up from AUD 256 in Q2 2024. Prime incentives have increased 0.4 pps to 27.5%.

Secondary net effective rents increased by 0.1% over the quarter to AUD 170 per square meter p.a., however they remain of 2.6% down year-on-year, from AUD 175 in Q2 2024. Secondary incentives have increased 0.2 pps to 28.1%.

Outlook: Vacancy and incentives expected to rise as development activity continues

Headline vacancy is expected to continue to recover slightly over the remainder of 2025 as completed stock is absorbed, however, vacancy is expected to increase over the medium-term as the number of major projects reach completion.

In line with headline vacancy, incentives are expected to increase as available stock increases.