Canberra, Australia – Knight Frank State Director Leasing Nicola Cooper said that like other CBD markets, this year has been relatively quiet in terms of leasing activity in Canberra as tenants remain wary of committing to new space.
“However, there is anecdotal evidence suggesting a pick up in activity may occur at the back end of the year,” Ms Cooper said.
“There are some positive signs in the Canberra office market with enquiry levels in most sub-markets on the increase. While this has yet to manifest into a tangible increase in the number of leasing deals being executed, there is a feeling in the market place that the worst of the downturn is behind us.
“Of course, having an office market buoyed by the security of the government sector helps. On the back of the stimulus package and other policy measures announced there are a number of government departments on the lookout for space, with several deals pending.
“New supply additions in several precincts that commenced before the economic crisis hit will serve to keep Canberra’s current high vacancy rate steady in the immediate term. But with speculative development now stalled, the level of supply and demand could potentially trend back to equilibrium.
“Nonetheless, this year we have seen incentives increasing and a slight reduction in face rents. There is little prospect of rental growth in the short term,” Ms Cooper said.