Canberra’s commercial and industrial property market moved through August with a very different set of drivers to Australia’s larger capitals.

Government remains the defining force in the office market, while industrial property continues to be shaped by land scarcity, owner-occupier demand, defence, data infrastructure, trades and public-sector support industries.

The office market is currently carrying the heavier adjustment.

JLL recorded Canberra office vacancy at 10.5% in Q2 2026, up from 10.4% at the end of 2025 and 8.0% at the end of 2024.

Year-to-date net absorption reached -55,200 sqm, largely because of occupier consolidation, while around 69,900 sqm of new office space had already completed by the middle of 2026 — almost double the 35,200 sqm delivered across all of 2025.

At the same time, Canberra still has a major office construction pipeline, strong government tenancy demand at the quality end of the market and a commercial economy increasingly influenced by defence, cybersecurity, data centres and technology.

Industrial property remains a much tighter and more straightforward story.

Fyshwick and Hume continue to dominate activity, smaller owner-occupier stock remains competitive, land in newer precincts such as Beard is scarce, and the ACT Government is now establishing a clearer framework around one of Canberra’s fastest-emerging commercial property sectors:

data centres.

Canberra’s commercial property market remains unlike any other capital

Canberra property does not behave exactly like Sydney, Melbourne or Brisbane.

Its largest employer is government.

That gives the city unusual commercial-property characteristics.

Office demand is heavily influenced by:

• Commonwealth departments

• ACT Government

• defence

• consulting

• professional services

• technology

• cybersecurity

• government contractors

Industrial demand is smaller, but often highly resilient.

Fyshwick, Hume, Mitchell and Beard support the physical businesses required to keep the city operating.

That includes:

• trades

• construction

• automotive

• warehousing

• logistics

• government contractors

• waste and recycling

• food distribution

• storage

• light manufacturing

This creates a commercial property market with two very distinct layers.

Canberra office vacancy increased to 10.5%

The headline office story during August came from JLL’s Q2 figures.

Canberra headline office vacancy rose to approximately 10.5%.

The increase followed a substantial contraction in occupied space, with year-to-date net absorption reaching approximately -55,200 sqm.

The main driver has been consolidation.

Large occupiers are becoming more efficient in how they use office space.

Government departments and professional organisations increasingly seek:

• fewer buildings

• better-quality buildings

• modern workplace layouts

• stronger sustainability credentials

• better transport

• higher security

That leaves some older secondary assets exposed.

Canberra delivered almost 70,000 sqm of new office space in the first half of 2026

Supply has also played a major role.

Approximately 69,900 sqm of new office stock completed during the first half of 2026.

That already exceeded the approximately 35,200 sqm delivered during all of 2025.

The timing is important.

New buildings are arriving just as occupiers are consolidating.

That combination naturally increases vacancy.

But it does not affect all property equally.

Prime office property is separating from secondary stock

Canberra is becoming increasingly polarised between modern prime-grade office buildings and ageing secondary assets.

Government and major corporate tenants increasingly prioritise:

• NABERS ratings

• energy efficiency

• security

• end-of-trip facilities

• flexible floorplates

• public transport

• staff amenity

Older buildings that cannot meet these requirements may need substantial capital expenditure.

This is creating a classic flight-to-quality market.

Headline vacancy can therefore rise while premium property still performs relatively well.

Office effective rents are still growing

Despite higher vacancy, JLL recorded Canberra gross effective rents at approximately $374 per sqm per annum, representing annual growth of around 3.9%.

That is an important detail.

Canberra’s office market is not simply weakening across the board.

Instead, tenants are increasingly selective.

Good assets can still achieve stronger rents.

Poorer assets face longer vacancy and greater incentives.

Canberra still has a huge office pipeline under construction

JLL reported approximately 226,800 sqm of office space under construction across eight projects in Q2 2026.

That means the market is not yet through the current supply cycle.

Near-term vacancy could remain elevated.

For landlords, the next several years will increasingly be about:

• repositioning

• refurbishment

• sustainability upgrades

• improving tenant amenity

• securing longer government leases

Secondary office buildings with no clear competitive advantage may become redevelopment opportunities.

Fyshwick remains Canberra’s dominant industrial precinct

Industrial property remains much easier to understand.

Fyshwick is still Canberra’s premier central industrial market.

Its location gives it access to:

• Canberra CBD

• Parliamentary Triangle

• airport

• Queanbeyan

• Tuggeranong

• inner south

• major arterial roads

The precinct has also evolved well beyond conventional industrial uses.

It now contains a mix of:

• warehouses

• bulky goods

• showrooms

• trade retail

• offices

• automotive

• food businesses

• recreation

That diversity strengthens land values.

5/49 Townsville Street sells for $420,000

One of August’s confirmed industrial transactions occurred at 5/49 Townsville Street, Fyshwick.

The approximately 102 sqm industrial unit sold on 12 August 2026 for $420,000.

That equates to approximately:

$4,118 per sqm of building area.

As always with strata industrial property, that should not be treated as a direct underlying land-value benchmark.

But it demonstrates the strength of Canberra’s small owner-occupier market.

Small Fyshwick units have a deep buyer pool

Properties of roughly 100–300 sqm are attractive to:

• builders

• electricians

• plumbers

• automotive businesses

• trades

• investors

• storage users

• online retailers

• service businesses

These buyers are often not purely yield-driven.

For many, the decision is whether to continue paying rent or own the premises their business operates from.

That keeps demand relatively deep.

Hume remains Canberra’s large-format industrial market

Hume plays a different role.

It accommodates heavier and larger industrial uses that cannot operate efficiently from central Fyshwick.

Typical occupiers include:

• logistics

• recycling

• waste

• heavy vehicle operations

• construction

• manufacturing

• warehousing

• government support services

Its location near the Monaro Highway gives it excellent access through Canberra and toward regional NSW.

27/61 Sheppard Street transacts during August

27/61 Sheppard Street, Hume sold on 25 August 2026.

The property comprises approximately 320 sqm within Hill Station Business Park.

The sale reinforces the continuing demand for modern strata industrial property in Hume.

A 320 sqm industrial property sits directly in the sweet spot for many owner-occupiers.

It is large enough for a meaningful operating business while still remaining affordable relative to a freestanding industrial facility.

Beard land sells for $1.05 million

One of August’s most useful industrial land transactions occurred at 59 Tantalum Street, Beard.

The approximately 893 sqm site sold for $1.05 million on 14 August 2026.

That equates to approximately:

$1,176 per sqm of land.

The site was marketed as Beard’s last remaining block available for sale and included approved development plans.

That scarcity is important.

It demonstrates how difficult it can be to create new industrial land close to established Canberra population centres.

Beard shows the scarcity value of small industrial land

Industrial land pricing in Canberra is heavily influenced by supply.

The ACT is geographically constrained by:

• planning controls

• government land ownership

• environmental considerations

• infrastructure sequencing

• National Capital planning

That means industrial land cannot simply expand indefinitely.

When small development-ready sites become scarce, owner-occupiers can compete aggressively.

The Beard transaction is a strong example.

Belconnen Circus Stage 2 sells during August

One of the largest Canberra development-site transactions recorded during August involved the Belconnen Circus Precinct Stage 2.

The approximately 18,175 sqm development site sold on 21 August 2026.

This is particularly important because Belconnen is already one of Canberra’s largest town centres.

Large development sites close to:

• established residential population

• government employment

• retail

• transport

• health

• education

are increasingly difficult to secure.

The site therefore represents a substantial future urban-development opportunity.

Bought & Sold

August produced several useful Canberra commercial and industrial benchmarks.

5/49 Townsville Street, Fyshwick

• Sold: 12 August 2026

• Price: $420,000

• Building: approximately 102 sqm

• Approximate building rate: $4,118/sqm

• Small industrial strata unit

• Established Fyshwick location

27/61 Sheppard Street, Hume

• Sold: 25 August 2026

• Building: approximately 320 sqm

• Hill Station Business Park

• Modern Hume industrial property

59 Tantalum Street, Beard

• Sold: 14 August 2026

• Price: $1.05 million

• Land: approximately 893 sqm

• Approximate land rate: $1,176/sqm

• DA-approved plans

• Marketed as Beard’s last remaining available block

Belconnen Circus Precinct Stage 2

• Sold: 21 August 2026

• Site: approximately 18,175 sqm

• Major Belconnen development holding

20 Isa Street, Fyshwick

• Sold: 2 July 2026

• Price: $1.635 million

• Building: approximately 407 sqm

• Office and warehouse accommodation

• Secure yard

• Useful recent freehold Fyshwick benchmark

72–74 Wollongong Street / 102 Gladstone Street, Fyshwick

• Sold: 1 June 2026

• Building: approximately 1,478 sqm

• Five strata units

• Approximately 56% leased to the Commonwealth of Australia

• Dual street frontage

Commonwealth tenancy remains a powerful investment attribute

The Wollongong Street property demonstrates one of Canberra’s most important investment characteristics.

A Commonwealth lease can materially alter buyer perception.

Government covenants are typically viewed as:

• secure

• long-term

• creditworthy

• relatively predictable

That can make Canberra office and commercial investments behave differently from comparable assets in other markets.

Investors often place substantial value on lease security, particularly during periods of economic uncertainty.

Government consolidation is also creating pressure

The other side of the same story is consolidation.

Canberra office demand is heavily exposed to government property strategy.

When departments:

• merge

• relocate

• reduce floor area

• move into new buildings

the effect can be substantial.

This is one reason Canberra office vacancy can change quickly despite relatively stable employment.

One major department relocation can create tens of thousands of square metres of vacancy.

Defence remains one of Canberra’s most important commercial demand drivers

Canberra sits at the centre of Australia’s national defence administration.

That creates substantial private-sector property demand from:

• defence contractors

• engineering consultants

• cybersecurity

• software companies

• intelligence services

• technology

• professional services

These businesses frequently want offices close to:

• Department of Defence

• Russell

• Barton

• Parliamentary Triangle

• airport precinct

This helps support premium office demand even while broader vacancy increases.

Defence demand increasingly overlaps with industrial property

Defence is no longer purely an office story.

Modern defence supply chains require physical infrastructure.

That includes:

• secure warehouses

• electronics

• technical workshops

• logistics

• vehicle support

• data infrastructure

• specialised storage

Fyshwick, Hume, Majura and the airport precinct are all potentially positioned to benefit from this broader demand.

Canberra Airport is becoming a major commercial precinct

Canberra Airport has evolved into a substantial employment hub in its own right.

The wider airport estate includes:

• Brindabella Business Park

• Majura Park

• Fairbairn

• Terminal precinct

Development applications and building activity continued through 2026.

Canberra Airport records current works across Majura, Brindabella, Fairbairn and Terminal precincts, including:

• building construction

• tenant fitouts

• external building works

• car park expansion

• terminal upgrades

This reinforces the airport’s role as much more than transport infrastructure.

Majura Park continues growing

Majura combines commercial development with large-format retail and airport-related uses.

Its strengths include:

• airport access

• major road connectivity

• parking

• large sites

• proximity to defence employment

Canberra Airport’s 2026 building records show continuing development activity in Majura, including early building works and later carpark and extension works.

As Canberra grows eastward, Majura should remain one of the city’s most strategically important commercial nodes.

Data centres have become one of Canberra’s biggest emerging property issues

One of August’s most significant commercial-property announcements came on 26 August.

The ACT Government announced it would develop a new ACT Data Centre Framework.

The framework will establish clearer rules around where future data centres can be developed and how proposals will be assessed.

Importantly, data centres will be restricted to areas already permitted under the planning system.

They will not be allowed in residential neighbourhoods.

Instead, they will be limited to appropriate:

• commercial

• industrial

• transport and services

• selected non-urban zones

This provides much greater certainty around future land demand.

Hume is already becoming a major data-centre location

Planning activity confirms that this is not theoretical.

The ACT planning system currently lists an Environmental Significance Opinion relating to the Hume Campus 3 Data Centre Development.

That is significant.

Data centres can create demand for:

• large industrial landholdings

• enormous electrical connections

• fibre

• secure infrastructure

• backup power

• cooling

• substantial capital investment

They are therefore capable of changing industrial land values even though they employ relatively few people per square metre.

Data centres could compete with conventional industrial development

The issue for Canberra is land and power allocation.

A data centre may occupy land that could otherwise support:

• logistics

• manufacturing

• warehousing

• employment-intensive industrial uses

It can also consume significant electrical network capacity.

That means future planning decisions increasingly need to balance:

• economic investment

• energy reliability

• water

• employment

• industrial land supply

The ACT Government’s new framework is designed specifically to provide greater certainty around these competing considerations.

Hume is becoming a strategic infrastructure precinct

Data centres are only one part of the Hume story.

The planning process for a major Emergency Services Maintenance and Training Facility at Hume also progressed during 2026.

The environmental impact process was completed in June, with the development application continuing through separate assessment.

The proposal includes land reserved for potential future development.

This strengthens Hume’s role as a location for large public-sector and industrial infrastructure that cannot be accommodated elsewhere.

Waste and recycling infrastructure is also expanding at Hume

Planning documentation also continues around the proposed ACT Materials Recovery Facility at Hume.

Again, these uses matter to industrial property.

Waste, recycling and infrastructure facilities require:

• large sites

• separation from residential uses

• truck access

• specialised servicing

There are relatively few Canberra locations capable of accommodating them.

Hume is therefore becoming increasingly difficult to replace.

Development Applications, Approvals & Projects Progressing Through Planning

Several projects are particularly important to Canberra’s commercial and industrial outlook.

Hume Campus 3 Data Centre

• Data-centre development progressing through environmental planning processes

• Hume industrial location

• Major digital infrastructure proposal

ACT Data Centre Framework

• Announced 26 August 2026

• Establishes clearer planning framework

• Data centres restricted to permitted commercial, industrial and services zones

• Designed to balance investment with energy, water and community considerations

Emergency Services Maintenance and Training Facility – Hume

• Environmental impact process completed June 2026

• Development application remains under assessment

• Strategic government infrastructure facility

• Significant future development land incorporated into the proposal

ACT Materials Recovery Facility – Hume

• Major recycling and waste infrastructure proposal

• Environmental assessment process already progressed

• Reinforces Hume’s strategic industrial function

Canberra Airport

• Continued commercial and infrastructure works across Majura, Brindabella, Fairbairn and Terminal precincts

• Carparking, building construction, fitouts and upgrades progressing throughout 2026

Canberra’s industrial land supply remains structurally constrained

Historical ACT planning work has long recognised the importance of maintaining industrial land supply.

Planning studies identified Fyshwick, Hume, Beard and Mitchell as key locations for short-term supply, with additional longer-term opportunities identified elsewhere.

The core issue remains valid today.

Canberra has relatively little industrial land compared with its population and economic importance.

That scarcity tends to support values.

Fyshwick cannot easily expand

Fyshwick is particularly constrained.

It is surrounded by:

• established suburbs

• major roads

• Jerrabomberra wetlands

• airport-related land

• government planning controls

That means future growth will increasingly come through redevelopment and intensification.

Older low-density sites may eventually be replaced by:

• multi-unit industrial

• showrooms

• bulky goods

• higher-value commercial uses

Landowners with underutilised property could therefore hold significant redevelopment optionality.

Hume remains the logical location for heavier industry

Where Fyshwick is constrained by surrounding urban development, Hume offers greater flexibility.

It is better suited to:

• heavy vehicle movements

• waste

• logistics

• utilities

• large compounds

• data infrastructure

• government service facilities

That functional distinction should continue to support demand for both precincts.

Mitchell remains strategically important to Canberra’s north

Mitchell serves much of northern Canberra.

The precinct supports:

• construction

• automotive

• trade

• warehousing

• retail

• services

As Gungahlin and northern Canberra continue to grow, Mitchell becomes increasingly valuable as a local employment and service hub.

A large proportion of its demand is population-driven rather than national-government-driven.

That gives it a somewhat different risk profile from the CBD office market.

Medical property continues to benefit from Canberra Hospital

Commercial property around Garran and Woden continues to benefit from health-sector demand.

A recent example was the July sale of Unit 11/5 Dann Close, Garran, a small medical/consulting property positioned immediately adjacent to Canberra Hospital and Centenary Hospital.

Health property is attractive because demand tends to be relatively resilient.

Population growth and ageing create continuing requirements for:

• specialists

• allied health

• diagnostics

• consulting

• rehabilitation

Woden remains the natural centre of this market.

Woden continues its transformation

Woden is increasingly shifting from a traditional town centre toward a larger mixed-use employment and residential hub.

Its combination of:

• Canberra Hospital

• government offices

• residential density

• retail

• public transport

supports a broad commercial economy.

As more residents move into Woden, commercial demand becomes less dependent on office workers alone.

That helps support:

• retail

• hospitality

• medical

• childcare

• services

Belconnen remains another major redevelopment market

The August sale of the Belconnen Circus Stage 2 site reinforces the long-term opportunity.

Belconnen contains an enormous established population and substantial employment base.

Large sites can support:

• residential

• mixed-use

• retail

• commercial

• health

subject to planning.

As Canberra becomes denser, major town-centre sites become progressively more valuable.

Canberra’s office market could eventually benefit from low future development feasibility

The near-term office pipeline is substantial.

But elevated construction costs and higher financing costs make new office development increasingly difficult without major pre-commitments.

This may ultimately benefit existing prime stock.

Once the current pipeline is absorbed, future supply could become much harder to justify.

The same pattern is already visible in several other Australian capitals.

Older office assets face the biggest challenge

Canberra’s problem is not necessarily too much office space in absolute terms.

It is too much office space that does not necessarily meet future tenant expectations.

Secondary assets increasingly compete against:

• new government-grade offices

• high sustainability buildings

• better workplace environments

Owners may need to consider:

• major refurbishment

• repositioning

• alternative uses

• redevelopment

This could create some of Canberra’s most interesting development opportunities later in the decade.

What developers and landowners should watch

Several themes are particularly important through the remainder of 2026.

Government consolidation

Large tenancy movements can significantly affect CBD and Barton vacancy.

Prime versus secondary offices

The gap between high-quality and ageing stock is likely to widen.

Fyshwick industrial scarcity

Central industrial land remains extremely difficult to replace.

Hume

Data centres, emergency services and infrastructure development strengthen the precinct’s role.

Beard

Limited land availability is supporting strong owner-occupier pricing.

Canberra Airport

Majura and Brindabella continue developing as substantial commercial centres.

Data centres

The new planning framework could shape where billions of dollars of future digital infrastructure is located.

Defence

Canberra’s defence and cybersecurity economy should continue supporting high-value commercial property.

Town centres

Belconnen and Woden remain major mixed-use redevelopment opportunities.

The bigger Canberra commercial property story

Canberra is becoming more commercially diverse than its traditional government-town image suggests.

Government will remain dominant.

But around that core is a growing private economy involving:

• defence

• cybersecurity

• technology

• data centres

• consulting

• health

• aviation

• logistics

• infrastructure

These sectors require different forms of property.

The result is a city where office demand may be consolidating while demand for specialised industrial and infrastructure land continues to expand.

That creates an interesting divergence.

The challenge is increasingly not simply supplying more property.

It is supplying the right property in the right location for increasingly specialised occupiers.

What this means for Canberra property projects

For Canberra commercial and industrial developers, strong project positioning increasingly needs to explain more than the building.

Buyers, tenants and government stakeholders want to understand:

• precinct context

• Commonwealth proximity

• defence connections

• access

• security

• power

• infrastructure

• permitted land uses

• future surrounding development

• sustainability

Strong project positioning can help:

• establish higher perceived land value

• explain future industrial projects

• attract owner-occupiers before construction

• support government and defence leasing campaigns

• demonstrate complex infrastructure projects

• communicate data-centre developments

• position mixed-use town-centre sites

• explain airport commercial precincts

• support stakeholder presentations

• reduce uncertainty before development

As Canberra’s commercial economy becomes more specialised, the projects that communicate their purpose, infrastructure and strategic location most clearly will be best positioned to capture demand early.

Commercial Property Marketing works with commercial and industrial developers across Australia to turn land, plans and future developments into clear property opportunities for buyers, tenants, investors and stakeholders.