Canberra Canberra prime industrial market indicators Canberra Net face rent ($ sqm) $200 Incentive (%) 1.0 Yield (%) 5.8 Capital value ($ sqm) $3,448 There are close ties between demand for industrial space and the performance of the Australian Capital Territory’s economy. Home to the vast majority of the Australian Public Service, the economy is based around service delivery and public administration. The territory was relatively immune to lockdowns through the first wave of the pandemic, charting a steady, albeit unspectacular recovery. Along the way, the territory did suffer from a temporary setback from a hard lockdown in the third quarter of 2021. Even so, the federal election provided a boost that has returned economic growth back to positive territory this year. Demand for industrial property was very strong through the first half of 2022, from both owner occupiers and tenants looking for space both greater and less than 1,000 square metres in size. Construction groups servicing major projects (including the Canberra Light Rail stages, the expansion of Canberra Hospital and a couple of major office buildings) have been the most prominent. A number of construction companies are attempting to take extra space to store higher inventory levels to counter supply chain disruptions faced elsewhere around the country, but efforts are being hampered by low vacancy rates. Building vacancies are reportedly very low across Canberra’s four main industrial precincts, in both prime and secondary quality buildings. On the back of low vacancies, prime rents continued to rise across the precincts in Canberra over the first half of 2022, reaching an average of circa $200 per square metre. This average sits within a range across the precincts of $190 to $210 per square metre for leases on space greater than 500 square metres in size. In line with a tight leasing market, incentives are very low in Canberra, sitting between 0-2 per cent, reflecting a 1 per cent average. Leasing market 30 Industrial Market Monitor | 2nd Half 2022
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