– Colliers International’s research shows A-Grade vacancy significantly less than PCA’s OMR –
Canberra, August, 9, 2017 – The Canberra A-Grade office vacancy rate fell from 9.8 percent to 9.4 percent, according to the Property Council of Australia’s (PCA) latest Office Market Report, however Colliers International research shows A-Grade vacancy is significantly less at 4.77 percent.
Michael Ceacis, Director of Office Leasing at Colliers International said the reason for the discrepancy is the way PCA has calculated vacancies.
“When we look at space in occupation, A-Grade vacancy is at 9.4 percent. However, when we take into account the musical chairs effect, where a new building is considered complete or space is pre-committed to, the vacancy rate is significantly less.
“For instance, the PCA report shows the Airport has vacancy of 76,978 sqm or 40.2 percent, when there is only approximately 27,000 sqm or 14.09 percent available for lease. The tenant committed to space at the Airport will be moving out of B and C-Grade stock.
“When we recalculate the figures based on this information, Canberra A-Grade vacancy shows only 4.77 percent. That puts Canberra’s A-Grade vacancy lower than Melbourne CBD (6.1 percent) and slightly higher than Sydney CBD (3.6 percent),” said Michael.
Colliers International expects A-Grade vacancy to tighten further with limited future supply. The next wave of new stock will be delivered mid-2019, approximately 15,000 sqm by Amalgamated Property Group’s Civic Quarter building in Canberra’s CBD.
“We expect incentives to drop and rents to increase as tenants seek out better quality accommodation and find limited A-Grade options.
“The limited supply of A-Grade stock will push tenants to B-Grade stock, and we expect vacancy to tighten, especially in the CBD and Parliamentary Triangle, as tenants seek out refurbished spaces that are still considered B-Grade but are refurbished to a very high standard,” said Michael.
17 Moore Street in Canberra’s CBD is the most recent building to undergo refurbishment with 4,766 sqm available for lease. 50 Blackall Street in Barton was refurbished last year with 3,218 sqm available for lease and 38 Sydney Avenue in Barton is currently undergoing refurbishment with completion expected April 2018 and 9,000 sqm of office space available.