IN THE Property Council of Australia’s latest Office Market Report, Canberra recorded the second largest vacancy decrease in the country.

“Over the last six months to July 2016, Canberra’s overall vacancy rate decreased from 14.6 to 13 per cent, with the vacancy rate in Civic having decreased from 11.0 to 10.3 per cent,” says ACT Executive Director, Merlin Kong.

“This was largely driven by a combination of positive demand and withdrawals, which saw A Grade vacancy decrease from 13.0 to 9.9 per cent, and B Grade vacancy decrease from 10.3 to 8.6 per cent.

“With competitive occupancy costs, low rental volatility, and one of the newest office stocks in the country—it’s not a surprise that Canberra recorded a higher net demand level compared to the historical average.

“However, even with higher than average demand, it is concerning that the report noted there is no new office space in the pipeline after 2017 over the medium term.

“Although A and B grade office space vacancy has decreased, and C and D grades have not fared as well, with vacancy increasing from 19.1 to 19.6 per cent and 23.9 to 24.6 per cent respectively.

“What we are seeing here is the market in action, with clear preference for higher grade office space over lower grades.

“It is imperative that we get the tax and planning levers right to renew tired parts of our city.

“The ACT property industry is eager to work with Government to get this right.”