Canberra's office market has remained steady in the face of the coronavirus pandemic, according to a new report.
The national capital's vacancy rate dropped from 10.3 per cent to 10.1 per cent over the past six months, the latest Office Market Report by the Property Council of Australia showed.
It is the lowest vacancy rate recorded in the ACT market since 2012 but it is still above the national vacancy rate of 9.5 per cent.
Canberra and East Melbourne were the only two markets where the vacancy rate dropped over the six months to July 2020, Property Council ACT executive director Adina Cirson said.
"This good news for the ACT - after the last six months we have experienced as a nation," she said.
While the ACT experienced a decline in the vacancy rate, empty office space in Civic rose by 0.3 per cent to 12.3 per cent. The vacancy rate in the non-Civic market dropped by 0.4 per cent to 9.2 per cent.
The rate does not take into account whether an office's employees are working from home, it is calculated by the space being leased to a company or organisation.
More than 60,000 square metres of office space is set to enter the market in the second half of 2020, however, only 4500 square metres will be added next year. From 2022 onwards more than 79,000 square metres will be added.
Ms Cirson said the federal public service helped Canberra's vacancy rate but demand from the private sector was evident.
"With over 50 per cent of the ACT market tenanted by the Commonwealth, these long term tenancies are no doubt helping our vacancy rates remain steady," she said.
"But it is great to also see the demand in the rest of the market despite the economic challenges we are all facing."
Real estate agents said the market had showed resilience.
CBRE ACT managing director Zoe Ferrari said the agency had experienced a steady flow of inquiry but expected there would be a shift towards "cost containment" decisions.
"This is likely to be evident across both private and public sectors as businesses remain nervous about the future economic landscape due to the ongoing uncertainty of COVID-19," she said.
JLL ACT managing director Andrew Balzanelli said landlords had become more flexible, as well, large government agencies were in the market for office space.
"We have observed some landlords become more flexible with the length of lease terms, as the current economic uncertainty has made certain tenants unsure about their future space requirements," he said.
"We are also starting to see the re-emergence of large government briefs into the market, which will generate leasing activity in the latter part of 2020 early 2021."
The ACT market followed different trends to Sydney and Melbourne, Knight Frank ACT head of agency Daniel McGrath said.
"Traditionally, Canberra's office market is counter cyclical to other major markets such as Sydney and Melbourne and the current situation is no different, showing similar indicators that were experienced during and post GFC as a result of a reactive Government stimulus," he said.