The latest Office Market Report from the Property Council of Australia shows office vacancy in Canberra increased from 9.2 to 10.7 per cent, mainly due to the addition of 54,000 square metres of new office space since January.
Property Council ACT & Capital Region Executive Director Ashlee Berry said the vacancy increase wasn't unexpected but signposted what needs to come next.
"Canberra is growing, and so is the quality of its commercial stock, but we're now at the point where supply is outpacing demand," Ms Berry said.
"We've seen new buildings come online, with more supply in the pipeline. That's good for tenants and the long-term future of the market, but we've got to keep demand growing too."
Canberra's office vacancy rate overall remains below the national CBD average of 14.3 per cent but Civic now has one of the highest vacancy rates across the ACT at 14.1 per cent.
"Canberra's strength lies in its stability, but Civic is changing and we'll lose out if we don't adapt quickly," Ms Berry said.
"That means rethinking how we attract businesses, support amenity, and get more people back into the city.
"The challenge is making sure the city centre remains a place where people want to invest, work and spend time.
"That's why we're continuing to call for a renewed focus on Civic vibrancy, including incentives for adaptive reuse, better support for businesses affected by light rail construction, and a stronger return to the office across government and private sector," Ms Berry said.
The Property Council of Australia Office Market Report is released twice a year. It provides detailed analysis of vacancy rates, supply trends, and market demand across Australia's major CBD and non-CBD markets.
The ACT Mid-Year Office Market Report will be released tonight at an event featuring a keynote from JLL's Tim Mutton and panel insights from Charter Hall's Paul Dorney, the Department of Finance, the National Capital Authority's Karen Doran, and Australian Strategic Property Advisers' Stephen Oxford.
