Interest in Canberra's office space has jumped by 50 per cent in the last year as several government and private leases near expiry.
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Tenants looking for prime commercial space may have to consider moving to the airport since only 5.7 per cent of the city's sought-after A-grade accommodation is available, according to Colliers International.
Analyst Dominic Aungles said Canberra's office leasing inquiry currently represented more than 105,000 square metres of space.
He said a minimum of 200,000 sq m would expire next year, with the majority of tenants expected to look for modern, A-grade buildings.
Mr Aungles said many existing tenants would "test the water" before deciding whether to move.
It's not just the public service departments canvassing workplace options, with federal and ACT government tenants making up 56 per cent of total inquiries.
"A lot of tenants are going to see if they can get a better deal," he said.
"Not all these will translate into new deals or locations."
Mr Aungles said tenants looking for larger, energy-efficient fit-outs in central Canberra were "being stifled by the lack of options" unless they turned their attention to the Canberra Airport precinct.
"The airport has the majority of contiguous modern A-grade office space for lease which can accommodate larger requirements coming to the market, however many tenants are seeking accommodation in the CBD and Barton," he said.
"The CBD has 5.7 per cent of A-grade office space vacant. This figure represents a market which is tight and marginally favourable to the landlord."
It's not only government departments focusing on the Parliamentary Triangle.
Mr Aungles said a significant portion of private-sector tenants were also looking to lease in the city or Barton to be near the government departments they were working with or were contracted by.
In contrast, the Brindabella Business Park near Canberra Airport continues to offer much more A-grade stock, making up 60 per cent of the total vacancy rate for this type of space in the national capital.
Overall, Canberra's office vacancy rate has slowed to its lowest level since 2000 however, Knight Frank expects the market to improve with more tenants expected to lease existing commercial space after the election period.
Meeting the demand for more central, A-grade stock could fall to office refurbishments, with several city buildings set for upgrades in the next two years.
Colliers' director of government services, Michael Ceacis, said buildings from 1200 to 9000 sq m would be upgraded, mostly to an A-grade level.
"There will be about 16,000 sq m of refurbished contiguous space become available in the CBD over the next 12 to 24 months, which will help meet demand," Mr Ceacis said.
The average new brief for leasable office space is 2470 sq m according to Colliers, with the largest request so far for 20,000 sq m.
Mr Aungles said tenants looking for spaces of between 500 and 2000 sq m were being offered "attractive incentives" including assistance with fit-out costs.
"The vacancy is softer in the lower grades, allowing tenants to negotiate more favourable terms with incentives of 25 per cent or higher," he said.
