Canberra second-highest for office rental growth in December quarter: CBRE

Canberra was only second to Sydney for office rental growth in the December quarter, according to a new report.

The CBRE Q4 Office MarketView released on Friday shows the national capital recorded 4.8 per cent net effective growth over the quarter, just behind Sydney at 5 per cent.

CBRE associate research director Felice Spark said the results came as Australia’s office cycle dipped and the national vacancy rate peaked at 10.9 per cent, as of December.

“Sydney and Melbourne continued to see net effective rental growth during [the fourth quarter of 2016] at 5 per cent and 2 per cent respectively,” she said.

“However, it was Canberra that surprised on the upside after recording the strongest white collar employment growth in the country.

“Increased demand from the public sector and limited vacancy in the prime end of the Civic precinct will all serve to support a positive outlook for the Canberra office market in the medium term.”

CBRE predicts Canberra’s office vacancy rate will drop to 7.8 per cent by 2020.

​Ms Spark said the ACT market had entered a phase of strong growth off the back of three years of declining white collar employment.

“Tightening vacancy in the Civic precinct and the lower vacancy outlook is expected to lead to 5.5 per cent compound annual growth in effective rents over the next three years,” she said.

Across Australia net office additions in 2017 are expected to be small at 1968 square metres.