It is the lowest vacancy rate of any capital city and a 12-year low for the ACT, the figures released in the Property Council of Australia's latest Office Market Report show.

Property Council ACT executive director Adina Cirson said the public service, which accounts for half of Canberra's office market, and long-term tenancies helped drive demand for offices, pushing against increasing vacancy rates across other capitals.

"This is good news for the ACT, especially off the back of 2020. It is pleasing to see the Canberra market is still sitting below the average Australian office vacancy rate," Ms Cirson said.

"Demand for prime office space is pushing record low vacancy rates - twice its historical average - with A-grade stock vacancy rates dropping from 6.4 per cent to 3.5 per cent."

Empty space in Civic decreased from 12.8 per cent to 8.5 per cent in the most recent report.

Nationally, vacancy rates increased from 11.6 per cent to 11.9 per cent - the highest in 25 years.

Office vacancies are calculated based on whether a lease is in place for office space, not whether the tenant's employees are occupying the space or working from home.

CBRE office leasing director Troy Markos said there had been an increase in the federal government workforce looking to short-term spaces.

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"Surge-space requirements totalling more than 18,000 square metres have absorbed the majority of fitted options across the market, resulting in a significant reduction to Canberra's overall supply," he said.

"Not only has overall vacancy reached a low not seen in years, A-grade vacancy at present is scarce, with both of the market's newest A-grade developments being close to full occupancy. The lack of immediate supply in this end of the market will shift occupier focus back to refurbished secondary options."

JLL managing director ACT Andrew Balzanelli said public service demand had dominated office leases.

"The administration of the rollout of the vaccination program, a federal election less than 12 months away and the 2021 census will likely see mandates from the public sector continue, sustaining leasing activity over the second half of the year," he said.

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