Canberra’s office market remains tightly held, with buyer demand outstripping supply.
In this robust and competitive market, quality properties are a rare commodity.
Nick Cotis of Raine & Horne Commercial Canberra says, “On the sale side, we can’t find enough quality properties to sell. They’re very tightly held as usual.”
However, a significant sale – with a ten-year lease to the government – is an exception. It has garnered strong interest from many groups worldwide and is expected to fetch about $30 million.
Office vacancy rates have stabilised at about 9.5%, with A-grade office space at 8.9% and B-and-C-grade around 12.8%.
Several older-style office buildings are in the midst of refurbishment, while A-grade stock is in limited supply.
Nick observes with fewer A-grade buildings expected to hit the market in the next couple of years, many C-and-D-grade buildings were in need of re-purposing or a refurbishment.
Meanwhile, Nick notes that the industrial sector has remained strong. “Mitchell, on the northern side of Canberra, is almost full up. It’s hard to find anything reasonable for lease there now,” he explained. “Yields range from 7.0 to 8.5 % for retail, 8 to 9.0 % industrial, and 6.5 to 10 % for office.”