Canberra Airport Boss Calls for CBD Special Economic Zone

A looming tsunami of office vacancies in the Canberra CBD might be stemmed if a special economic zone is implemented in the commercial heart of the national capital, says a senior executive of the city’s privately owned airport. Richard Snow, the head of property for Canberra Airport and the Capital Property Group, says his mooted special economic zone would involve a suite of incentives aimed at invigorating the city’s commercially challenged CBD, long known by Canberrans as Civic. “It’s against the backdrop of the Canberra CBD having some real problems,” Snow tells The Urban Developer. “Some of that is created by the amount of construction work going on principally due to the [southern extension of Canberra’s] light rail [which] means at the moment the city is basically cut in half ... and then also the Commonwealth Avenue Bridge being redone so they’ve closed half the bridge. “I think it’s about a focused, targeted area, that being the CBD, and looking at that differently to other areas of Canberra and saying, ‘OK, we really need something to happen here’.” Snow says contraction of Commonwealth government demand for office space at Civic, due partly to the work-from-home phenomenon and government take-up of new buildings outside Civic, has also contributed to a hollowing-out effect. “You’re going to have a situation where there’s a lot of buildings left behind,” he says. “I thought a special economic zone; if you called it something like that and had a bunch of different policy objectives then there’s real opportunity to attract capital and get some things moving.” This month, an ACT Property Council report said that office vacancy had edged down in Civic during the past six months but that the area faced a growing number of disused buildings and a vacancy rate of 25 per cent by 2029. ▲ Richard Snow, head of property for Canberra Airport and the Capital Property Group, has floated the idea of a Special Economic Zone for Civic in Canberra. “It’s probably time to think what that means when you’re looking at 25 per cent vacancy potentially in five or so years and you’ve got a whole bunch of older buildings built in the ’ 60s and ’ 70s particularly in that city core area and there’s just no one investing in them because the economics aren’t there,” Snow says. Squarely in Snow’s crosshairs is a local betterment levy called the ‘lease variation charge’ or, in a national capital jam-packed with initialisms, the LVC. “With the lease variation charge, when you change the use of your older asset from, say, office to residential, [the Australian Capital Territory government] charge[s] you 75 per cent of the value uplift from one use to the other,” Snow says. “The LVC is the big one and you can look at the payroll tax, you can look at a whole bunch of different measures effectively to get more residents into the CBD. “If you look at the LVC, what the [ACT government] budgeted the financial year before last [was] to raise $45-million and they raised about $12 million ... so you’ve got a situation where the tax isn’t raising anything really.” The LVC operates across the ACT and Snow says it “needs to be thought about differently” at Civic. “If you’re trying to raise a tax which isn’t raising anything anyway, what have you got to lose?,” he says. ▲ Apartments are part of the mix, but office dominates the Civic precinct. Beyond addressing disincentives, a focus on incentives would increase investment in Civic, Snow says. “What private investors need are some incentives and ... if you actually changed a few things ... such as, in the City of Sydney if you provide a public good such as a park or greenspace you get a floorspace incentive,” he says. “The industry really does respond well to incentives. “We’ve only got about 4500 people in the Canberra CBD at the moment; that’s nothing really.” Capital Property Group has $1.5 billion of work either on the go or on the drawing board in and around Civic, comprising the ongoing Constitution Place and London Central projects and a major residential and hotel development that is yet to be launched. Snow says none of these projects is subject to the LVC as the sites were bought from the ACT government. “So, it’s not a self-interest thing,” he says. “It’s about trying to get the place working together and seeing more investment in the CBD as a whole more so than us lobbying for changes to the settings for our own group.” ▲ Office blocks in Civic. Snow say the industry ‘really does respond well to incentives’. Canberra-based associate with SGS Economics and Planning Ed Wensing says Snow’s special economic zone idea has some merit. “I’ve seen that happen in other cities where economic zones have been identified and governments have concentrated their efforts to revive places, particularly older industrial sites for example; converting them to more modern offices and residential accommodation for example,” he tells The Urban Developer . “That kind of concentrated investment in effort and focus for a period is certainly warranted for Civic, if Civic is to remain the principal CBD for the city. “And I suspect that once the tramworks settle down and the tram starts running we’ll begin to see some of that happen but that would certainly be an encouraging focus that the city needs.” Wensing says Civic, whose name derives from the original 1911 plan for Canberra conceived by husband-and-wife architects Walter Burley Griffin and Marion Mahony Griffin, was always intended to be the dominant town centre among a small metropolis of dispersed town centres. “The underlying philosophy there was to achieve economies of scale and reverse travel economies in the transport demand in the city,” he says. “The planning philosophy that underpinned the string of town centres in Canberra was to create a linear city with reverse travel demand in both directions in the morning and evening peaks, and to some extent that’s been achieved; that was the planning philosophy for the 1970s and ’80s.” Wensing says that, from an urban-form perspective, major development in recent decades around the airport to the east of Civic and of the Molonglo Valley to the south-west has “corrupted” the north-south linear city concept. Confronting that critique, Snow says commercial development around airports is now a “well-established global trend”. ▲ SGS Economics and Planning Ed Wensing says Civic was always intended to be the dominant town centre. “You can be in Canberra, you can be in Copenhagen, you can be anywhere,” he says. “Having development around the airport, be it office, retail, data centres, hotels, what have you, is a well-established planning principle and we’re very passionate about and proud of what we’ve done and there’s uses around Canberra Airport that wouldn’t even be in Canberra without doing what we’ve done. “And we’re investing the most amount into the Canberra CBD of any private group ever.” A company controlled by businessmen Terry Snow [who died in 2024] and his son, Stephen Byron, Richard’s cousin, bought Canberra Airport from the Commonwealth government in 1998 when the small and ageing facility was surrounded by sheep paddocks. The airport precinct now includes a modern terminal, a major business park, Australia’s largest Woolworths and Canberra’s only Costco. ACT Planning Minister Chris Steel was contacted for comment, including on the special economic zone idea and the future of the lease variation charge.

Canberra Airport Boss Calls for CBD Special Economic Zone

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Canberra Airport Boss Calls for CBD Special Economic Zone

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