National Capital Authority approved Cromwell Property Group's plans to knock down the four-storey Centenary House at 19 National Circuit and build a larger, A-grade office site spanning 18,000 square metres of lettable space.

Demolition works have progressed significantly and construction of the office building is expected to be completed in mid-to-late 2024.

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The development will include end-of-trip facilities with space for more than 130 bicycles, a ground floor café and 225 car parking spaces.

Cromwell acquired the block of land from Labor entity John Curtin House Limited for a reported $35 million in 2005. The federal Labor headquarters was the subject of two royal commissions, in 1994 and 2004, after the Liberal-National party accused Labor of charging excessive rent.

Property agencies JLL and Colliers have been appointed to lease the new development and will be particularly looking to secure Commonwealth tenants.

JLL managing director, ACT, Andrew Balzanelli said the offices would be designed to attract "Commonwealth agencies that are seeking to be in a key area of influence".

According to the Property Council of Australia, over the six months to July 2021 Canberra's overall office vacancy rate was 7.7 per cent.

JLL's own research shows the vacancy rate for prime office assets in Canberra fell to 3.6 per cent in the third quarter of 2021. The agency also reported 2.3 per cent vacancy across Barton's prime office spaces.

Mr Balzanelli said the data shows strong demand for A-grade office space in the ACT.

"Occupiers are securing A-grade office space in order to attract staff back to the office via a high-quality working environment," he said.

Cromwell head of development Chris Hansen said the new building would help meet this demand and would include "sustainability credentials and smart building technology inclusions".

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