Q1 2026 net absorption totalled -54,400 sq.m., with vacancy at 10.5%

• Canberra recorded negative net absorption of -54,400 sq.m. in Q1 2026, driven by large occupier consolidations (>1,000 sqm), bringing total net absorption over the last 12-months down to -80,300 sq.m.
• As a result, the headline vacancy rate increased by 0.1 pps to 10.5%, up 1.3 pps year-on-year from 9.2% in Q1 2025.

Completions totalled 50,000 sq.m, while 246,000 sq.m. remains under construction with high pre-commitment

• 50,000 sq.m. of office stock completed in Canberra over the quarter, while 111,100 sq.m. was withdrawn for refurbishment, helping to offset vacancy.
• Despite consolidation activity pushing up vacancy, there remains 246,000 sq.m. under construction supported by strong Commonwealth pre-commitment.

Prime gross effective rents increased 5.0% to AUD 373 per sq.m. p.a., with incentives unchanged

• Prime gross effective rents increased 0.5% over the quarter to AUD 373 per sq.m. p.a., driven by a slight increase in prime gross face rents, while prime incentives remained unchanged. Canberra’s prime gross effective rent is 3.5% higher year-on-year, with growth constrained by a marginal uplift in average prime incentives, outstripping strong gross face rent growth.
• One transaction totalling AUD 6.5 million was recorded in Canberra over the quarter. Prime yields softened by 25 basis points at the lower end, resulting in a midpoint yield of 7.25%, within a range of 6.50% to 8.00%.

Outlook: Vacancy stability expected before 2027 public sector consolidation resumes

• Headline vacancy is projected to continue increase over the medium-term, reflecting ongoing occupier consolidation activity as the Australian public service continues to pursue improved occupational efficiency.
• Incentive growth is anticipated in line with elevated vacancy, which is likely to further inhibit effective rental growth. Further office completions are forecast over the next 12-months, with an additional 34,700 sq.m. expected to complete by the end of 2026.