This map highlights the bleak reality of the fully or largely vacant (or soon-to-be vacant) CBD office buildings. Factor out retail, hospitality and residential spaces, and experts say the picture is even more stark. Image: Region.
Tony Brine studies a map of Canberra’s CBD, a highlighter painting a stark picture: tens of thousands of square metres of prime office space sitting (or about to be sitting) idle.
“It’s like someone wiped out the government CBD workforce,” the analyst at Australian Strategic Property Advisers (ASPA) says.
He has a pretty good idea how this number of vacancies has crept into the district, but says without mechanisms to keep the pattern in check, it’s a grim omen for the future of the heart of the national capital.
There are no silver bullets to turn the tide, but even to begin to address the death of the Canberra CBD, we must first understand the root cause of the problem.
Canberra, Tony explains, was once built on one of the most deliberate city models in the world: a strong CBD supported by surrounding town centres. The federal government, the city’s largest employer, was happy to place its workforce in either. The arrangement allowed people to work close to where they lived, supported small businesses and sustained a vibrant city heart.
Over time, however, other precincts like Barton emerged to chip away at the model.
“For some reason, a location that was originally only home to central departments has become an area that all government entities want to move to,” Tony says.
Contributing to the issue was a policy change more than a decade ago.
A property transaction involving the Department of Immigration sparked a new rule in the Commonwealth property framework: if a department relocation would remove more than 10 per cent of the local workforce, an impact assessment was required to protect communities from sudden shocks.
“In the CBD, that safeguard never worked,” Tony says.
“The precinct is so large that no single department hits that threshold. But when several incrementally move out, the effect is devastating. The policy has failed.”
ASPA’s Stephen Oxford and Tony Brine say change is needed to stem the alarming tide of vacant office space in the CBD. Photo: Michelle Kroll.
That quiet exodus has accelerated in recent years, driven increasingly by the government’s net-zero policy. Any agency moving into a building must meet stringent NABERS energy ratings — 5.5 for existing buildings, 6 for purpose-built facilities. On paper, it sounds green, but Tony argues that in practice, it’s backfiring.
“How is it an environmentally sound outcome to walk away from a building that’s purpose-built for government, with all the embedded carbon in the concrete, just because it’s rated a 5 instead of 5.5?
“Frankly, it’s the worst carbon outcome.”
The result: vast swathes of still-young, high-quality buildings stand vacant.
“Some of these buildings are only 15 years old,” ASPA managing director Stephen Oxford says.
“They’re very early in their useful life. You walk in and they’re cavernous — thousands of square metres designed specifically to meet government requirements.
“No other city in Australia builds like this.”
Stephen says Canberra’s office stock is uniquely tailored for federal departments, making it all but impossible to repurpose. Procurement practices need to evolve to better consider the building’s purpose once the department vacates, supporting net zero concepts of repurposing and reuse of these assets.
So what’s to be done?
Replacing offices with housing seems the obvious answer given the shortages, but Tony points out that current planning rules penalise developers who try to convert office space into residential. Big business might seem like another option, but the ACT lacks incentives to lure large corporations and has the highest payroll tax rate in the country.
Meanwhile, the cost of doing nothing grows.
“An empty CBD doesn’t just mean lost rent — it starves small businesses, cafes and retailers of the foot traffic they need to survive. The centre of the national capital risks becoming a hollowed-out shell,” Tony says.
“No one’s to blame. Federal agencies are just tenants, chasing the best deal. Unfortunately, in a larger precinct like the CBD, they don’t have to worry about the impact on transport or the local economy when they leave.”
Tony suspects that to uncover the answer, industry, the ACT government and the federal government must come together and workshop incentives or reforms.
“That could mean flexibility on net zero targets that account for embodied carbon, or a more contemporary approach to procurement. Or it could mean planning reforms that let developers adapt older spaces for housing,” he says.
“With the right reforms, Canberra’s CBD could be reimagined – but it will take time.”
