A NEW report on the state of offices in Geelong's CBD has found more than half the market is of extremely poor quality, while there is little or no higher-quality offices available around town.

While the report, by Opteon Victoria, found Geelong had one of the country's lowest office vacancy rates, attracting new business to the city would be near impossible with the glut of second-class office space.

According to the report, 67 per cent of all office space in Geelong is considered the lowest grade, while premium office space accounts for just 6 per cent of the market.

The grade of office space was rated on functionality and quality of finishes in Geelong's CBD office market.

"Secondary accommodation is becoming increasingly unattractive to tenants due to best-practice requirements in terms of fit-out design, while many tenants are also seeking space that meet environmental energy ratings," Mr Jenkins said.

Geelong's only premium-grade office space is the TAC building, while Government tenants occupy almost all the A-grade space.

There is little vacant space in the high-grade offices, while 86 percent of all vacant offices in Geelong are of poor quality, with the majority located in Brougham and Moorabool streets.

"At the moment, we've got an over-abundance of secondary grade stock and until you have new prime-quality office stock developed, you are going to struggle to attract new tenants into the Geelong CBD," Mr Jenkins said.

Opteon Victoria's Todd Devine said the second-class office space in Geelong had become redundant and was better suited to conversion for other uses.

"It at least requires refurbishment but the lack of car parking for much of this office accommodation will make conversion the more likely alternative," Mr Devine said.

Corio MP Richard Marles said increasing premium office space was the key to attracting new business.

"To get more offices based in Geelong is a real opportunity, but solving the premium-office-space question is clearly a critical piece of the puzzle," he said. "Getting people into the first floor of the Geelong CBD will bring life back to the CBD and if it's not office space then we need to be looking at innovative ways to encourage landlords to convert those spaces to housing."