Canberra

OfficeMarket

knightFrank

August2025

Lowestvacancyrateamongstallcapitalcitiessincemid-2021.

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CANBERRAOFFICEMARKET2

OccupierdemandremainsstrongacrossParliamentaryprecincts,highlightingdemandforbestinclassassets

NakiDai

SeniorAnalyst,RESEARCH&CONSULTING

10.7%

Riseinoverallvacancyy/yLowestvacancyrateamongstall

capitalcitiessincemid-2021.

steady

Yieldsholdfirm

PrimeyieldsinCivicand

Parliamentaryprecinctscontinuetoholdfirm.

1.6%

Primevacancyin

ParliamentaryprecinctsPrimespaceinParliamentary

precinctscontinuetobeindemand.

2.5%

Annualrentalgrowth

Primenetfacerentsaverage$473/sqmintheCivicandParliamentary

precincts,anincreaseof2.5%y/y

47.6k

Sqmofnetadditions

NetsupplyinH12025tosupport

sustaineddemandincorelocations.

$18m

H12025salesvolumes

SubduedinvestmentactivitywithonlyonetransactionrecordedinH12025.

canberraofficeMarketIndicators-July2025

Grade

TotalStocksqm

Vacancy

Rate%

AnnualNet

Absorptionsqm

AnnualNet

Additionssqm

AverageGrossFaceRent

$/sqm

Average

Incentive%

CoreMarketYield%*

AGrade

Civic(City)

523,526

16.2

5,572

44,677

581

28.1%

6.75-7.25

Parliamentary

287,889

1.6

4,579

4,500

588

26.7%

7.00-7.50

TownCenters

258,547

9.1

1,918

0

467

30.9%

8.50-9.00

Other

420,512

10.0

27,630

19,703

Secondary

Civic(City)

237,961

9.6

-2,078

-2,839

484

30.1%

8.50-9.00

Parliamentary

162,251

2.7

-484

-2,193

492

30.0%

8.25-8.75

TownCenters

181,985

21.6

-2,344

0

383

31.2%

9.75-10.25

Other

386,393

10.5

-7,580

-1,790

TotalMarket

2,459,064

10.7

27,213

62,058

Source:KnightFrankResearch/PCA*assumingWALE5years

ParliamentarycomprisesBarton,ParkesandForrestofficeprecincts;TownCentrescomprisePhillip,TuggeranongandBelconnenofficeprecincts;OtherincludesremainingPCAsublocalities

CANBERRAOFFICEMARKET3

incorelocations

LOWESTVACANCYAMONGSTCAPITALCITIES

OverallvacancyinCanberraincreasedfrom9.2%to10.7%overthesixmonthstoJuly2025,drivenbytheadditionof53,789sqmofnewsupply.Notably,vacancyremainsinlinewithits10-yearaverageandisthelowestacrossallcapitalcities.Themarketrecordedpositivenetabsorptionof6,794sqminH12025,bringingannualnetabsorptiontoasolid

27,213sqm.

Morespecifically,primevacancyinCivicmeasured16.2%,alongside1,870sqmofpositivenetabsorptioninthesix

monthstoJuly2025.Parliamentaryprecinctsmaintainedalowprimevacancyrateof1.6%asatJuly2025,highlightingtheemphasisonbest-in-classassetsincorelocations.Inthesecondarymarket,vacancysitsat9.6%inCivicand2.7%intheParliamentaryprecincts.

SUPPLYINFLUXINCORELOCATIONS

Thefirsthalfof2025saw53,789sqmaddedtothemarket,takingtotalofficestockto2,459,064sqm.Twobuildings

reachedpracticalcompletioninH12025:CapitalAirport

Group’s9–11MolongloDr,CanberraAirport(19,703sqm),andMorrisPropertyGroup’s1CityHill,Civic(34,086sqm).Ontheotherhand,severalwithdrawalsoccurred,including175–179LondonCct,Civic(570sqm)forredevelopment;13LondonCct,Civic(2,269sqm)forhotelconversion;and10–12BrisbaneAve,Barton(3,350sqm)forredevelopment.

Lookingahead,constructioniswellunderwayat62

ConstitutionAve,Campbell(16,000sqm),scheduledfor

completioninH22025;8–10PetriePlaza,Civic(5,000sqm);and1AConstitutionPlace,Civic(15,500sqm),bothexpectedtocompleteinH22026.Meanwhile,siteworkshave

commencedat19NationalCct,Barton(19,817sqm),with

completionestimatedin2027.ThepipelinewillprovidenewprimeofficespaceopportunitiesintheCivicand

Parliamentaryprecincts,whichhavehistoricallyhadlimitedavailability.

STEADYFACERENTALGROWTH

IntheCivicandParliamentaryprecincts,primenetface

rentsincreasedby2.5%to$473/sqm($585/sqmgrossface,up3.7%y/y)overthe12monthstoJuly2025.Similarly,netfacerentsinthesecondarymarketroseby3.1%to$375/sqm($488/sqmgrossface,up3.5%y/y)overthesameperiod.

Incentiveshavedeclinedslightlyforthefirsttimesince2017forprimespaceintheCivicandParliamentaryprecincts,

averaging27.4%inJuly2025,downfrom27.6%inJanuary.Asaresult,primeneteffectiverentsincreasedby1.8%to

$313/sqm.Meanwhile,secondaryincentiveshaveremainedstableat30.0%sincemid-2024intheCivicand

Parliamentaryprecincts.

canberraofficesupplyadditionsandwithdrawalsTotalmarket,persixmonthsperiod('o00sqm)

Grosssupplywithdrawals——Netsupply

source:knightFrankResearch,PCA

primenetfacerentsandincentivesparliamentary&civicaverage,$/sqm,%

IncentivesNetfacerent

source:knightFrankResearch

canberravacancymajorprecincts*persixmonthperiod(%),bygrade

prime——secondary

source:knightFrankResearch,PCA*incorporatescivic,parliamentaryprecinct&Towncentres

CANBERRAOFFICEMARKET4

boostinvestorconfidence

DEALFLOWTOPICKUPONTHEBACKOFINVESTORCONFIDENCEANDAMOREPOSITIVEECONOMIC

OUTLOOK

Afterapick-upin2024,investmentactivityhasbeen

subduedin2025,withonlyonerecordedtransaction.Theonlytransactionwas4MortSt,soldoff-markettoAEGIS

InvestmentGroupinH12025for$18million,achievinga

coremarketyieldof8.5%.ThebuildingwaspreviouslyheldbyGladiatorMEIF,whoacquiredtheassetin2013for$14.75million.Thebuildingiscurrently63%occupiedwithashortWALEof1year,tenantsinclude:theAustralianElectoral

Commission,TheAustralianRedCrossSociety,andSAPAustralia.

Withtheimprovedeconomicoutlookandinvestor

confidencereturning,dealflowisexpectedtopickupinthenearterm.

YIELDSHOLDINGFIRM

SimilartoothercapitalcitiesexceptMelbourne,yields

continuetoholdfirmsincemid-2024.IntheCivicand

ParliamentaryprecinctsinCanberrayieldshaveheldfirmat7.1%.Thishasresultedinamodestincreaseof2.7%in

capitalvaluesovertheyear,inasignthatcapitalvalueshavestartedareturntogrowth.SecondaryyieldsintheCivicandParliamentaryprecinctsremainunchangedat8.50%.

AcrossTownCentres,yieldshaveheldfirmsince2024,

averaging8.7%forprimeand9.9%forsecondary.The

currentprimeyieldspreadbetweenCivicandParliamentaryandTownCentresstandsat159bps.

canberraofficesales$1om+

Bypurchaser($m),domesticvoffshore

uDomesticuoffshore

YTD

source:knightFrankResearch

canberraofficecoremarketyield

primevsecondary,blendedaverageyield(%)

——prime——secondary

source:knightFrankResearch

Recentsignificantsales

Property

Price$m

Core

Market

Yield%

NLA

sqm

$/sqmNLA

WALE

Purchaser

Vendor

SaleDate

4MortSt,Canberra

18.0

8.5

5,422

3,320

1.0

AEGISInvestment

GladiatorInvestments

Apr-25

2ConstitutionAve,Canberra

90.1

7.9

19,465

4,626

3.2

Growthpoint

ISPT

Nov-24

18CanberraAve,Forrest

72.0

6.3

9,646

7,464

3.0

SentinelProperty

CharterHall

Nov-24

Source:KnightFrankResearch

Recenttenantcommitments

Occupier

Property

Precinct

Sizesqm

FaceRent$/sqm

Termyrs

StartDate

Built~

14MooreSt

City

247

515

5

Nov25

Coa(AustralianCentrefor

InternationalAgricultureResearch)~

38SydneyAve

Forrest

1,453

515

12

Aug25

Lander&Rogers^

15NationalCct

Barton

431

485(g)

3

Jul25

VMWareAustralia^

60MarcusClarkeSt

City

345

500

5

Jul25

OrbisOperations~

15NationalCct

Barton

326

550

5

Jun25

NextApex~

60MarcusClarkeSt

City

172

510

3

Apr25

~Direct^Sublease(g)grossfaceSource:KnightFrankResearch

canberramajorofficesupply

Property

Area

(sqm)

Developer

Majortenants

Stage

Timing

9-11MolongloDrive,Airport

19,703

CapitalAirportGroup

Complete

H12025

1CityHill,Civic(OneCityHill)

34,086

MorrisPropertyGroup

Spec

Complete

H12025

62ConstitutionAve,Campell(AnzacParkEast)

16,000

AmalgamatedPropertyGroup

Telstra

UnderConstruction

H22025

1AConstitutionPlace,Civic(ConstitutionPlace)

15,500

CapitalAirportGroup

ClaytonUtz

UnderConstruction

H22026

8-10PetriePlaza,Civic

5,000

NDH

UnderConstruction

H22026

15SydneyAvenue,Barton

37,000

Doma/KenyonInvestments

CommonwealthATO

UnderConstruction

H22026

19NationalCircuit,Barton(CentenaryHouse)

18,128

CromwellCorporation

Commonwealth

UnderConstruction

2027

10-12BrisbaneAve,Barton

14,000

WillemsenGroup

Mooted

2027+

40BrisbaneAve,Barton

16,500

StrataPlan

Mooted

/

2DarlingSt,Barton

10,900

DOMAGroup

Mooted

/

Section96,Civic

37,000

QIC

Mooted

/

50KentStreet,Deakin

8,500

EvriGroup

Spec

Mooted

/

Source:KnightFrankResearch

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MarcoMascitelli

+61290366656

Marco.Mascitelli@au.knightfrank.com

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+61290366756

Ben.Burston@au.knightfrank.com

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+61488216406

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