The Braddon landlord betting on flexible workspaces while the rest of Canberra's office market hesitates

Kingsley & Marsh Property Group has leased out 94 percent of its refurbished Mort Street, Braddon building — a six-storey former Commonwealth tenancy — just eight months after converting it into a flexible co-working and short-term office hub. That figure sits well above the ACT's broader CBD office vacancy rate, which the Property Council of Australia put at 11.3 percent in its January 2026 office market report, the highest for Canberra since 2014.

The timing matters. Nationally, investor appetite for commercial property has taken a battering. Melbourne's auction clearance rates have slumped, AI data centre demand is crowding out industrial land from Sydney's western fringe to outer Canberra, and the federal government's ongoing work-from-home guidance for Australian Public Service staff — still unresolved under the APS Workplace Flexibility Review that concluded in March 2026 — has left large-format, long-lease office blocks sitting half-empty across Civic and Barton. Kingsley & Marsh's managing director spotted that gap two years ago and started moving against the grain.

The company's model is straightforward: ditch five-year leases, offer memberships from $650 a month for a hot desk to $4,200 a month for a private six-person suite, and let tenants scale up or down with 30 days' notice. Current occupants inside the Mort Street building include a defence-sector consulting firm, two ACT government agencies on short-term arrangements, and a cluster of tech startups that migrated from the now-oversubscribed Entry29 co-working hub on Mort Street's eastern end.

Filling the gap left by the Commonwealth pullback

The APS shake-up is the central engine here. Since mid-2025, the Department of Finance has been quietly rationalising its office footprint under the Commonwealth Property Management Framework, returning floor space across Barton and the parliamentary triangle. That has pushed smaller government-adjacent businesses — lobbyists, policy consultants, tender writers — to look for homes outside the traditional Civic core. Marcus Wharf, a Canberra-based commercial tenant adviser at Colliers' London Circuit office, told clients in a May 2026 briefing note that the inner-north precinct, particularly Braddon and Reid, had absorbed a disproportionate share of that displacement.

Kingsley & Marsh is not alone in trying to profit from the churn. Dexus relaunched its Canberra Place offering at 10 Moore Street in late 2025, and the National Convention Centre precinct has quietly marketed excess conference-floor space as day-rate offices. But the Mort Street operation has a specific edge: it sits 400 metres from the light rail stop at Mort Street/Cooyong Street, and its fit-out — completed in September 2025 at a cost the company puts at $3.8 million — was designed explicitly around small teams of four to twelve people, the segment being squeezed hardest by the current market.

What the numbers actually say

Canberra's total office stock is approximately 1.87 million square metres, according to the Property Council's January figures. Net absorption for the twelve months to December 2025 was negative 18,400 square metres — meaning the market shed occupied space over the year. Premium-grade assets in Civic have held up relatively well, with face rents around $560 per square metre annually, but B- and C-grade stock has seen effective rents fall by as much as 12 percent since the start of 2025 as incentives — rent-free periods, fit-out contributions — have blown out. That is precisely the grade of building Kingsley & Marsh is repositioning.

For businesses eyeing a move in the second half of 2026, the practical read is this: the window to negotiate hard on Canberra office space is still open. Incentive packages on direct leases are generous, particularly in the Woden Town Centre and Belconnen CBD, where vacancy runs even higher than Civic. But the flexible end of the market — where Kingsley & Marsh operates — is tightening, which suggests the arbitrage between traditional and flexible office costs will narrow by early 2027. Companies that want the flexibility without paying the premium would do well to lock in terms before that gap closes.