Canberra’s office market is showing tentative signs of recovery with leasing up threefold on the last 12 months, according to Savills’ latest Canberra Office Briefing: October 2015, following significant reductions in the public sector workforce and workspace ratios along with new `Green’ office requirements, which had seen the vacancy rate reach 15.3 per cent.
Report author Savills’ New South Wales Research Analyst, Houssam Yakzan, said while the market was currently experiencing negative net absorption, the speculative development phase had ended and the 2015 Federal Budget did not appear to provide for further significant public sector workforce cuts.
"The situation that the Canberra office market finds itself in at the moment is the result of a coincidence of opposing forces including the election of a conservative government, which traditionally sees a reduction in the size of the public sector workforce, and the occurrence of a speculative construction cycle.
"Both of those factors now appear to have come to a head. Over the next ten years we expect to see a forecast rise in white collar employment delivering positive net absorption and we could see the beginning of that improvement in 2015/2016, however that improvement will also be tempered by negative net absorption in C and D grade buildings,’’ Mr Yakzan said.
According to figures from Deloitte Access Economics white collar employment is expected to grow at an average of 1 per cent per annum from 2017/18 to 2024.
