Construction giant Geocon misled consumers while advertising apartments in Canberra's south, the ACT's Commissioner for Fair Trading will allege.

Key points: Fair trading begins legal action against Geocon over allegedly misleading advertising

Fair trading begins legal action against Geocon over allegedly misleading advertising Prospective buyers were told to expect a 10-minute tram ride to the city, despite plans not being finalised

Prospective buyers were told to expect a 10-minute tram ride to the city, despite plans not being finalised Geocon also promised investors a 7 per cent rental yield

Fair Trading today commenced a case in the ACT Supreme Court, claiming the ad campaign for the Grand Central Towers development in Woden was "false and misleading".

The case alleges developers Geocon, Zapari, Bowes and GZ misled prospective buyers by stating they could expect a 7 per cent rental yield for five years from the apartment complex and about the proximity of light rail to the building.

In a statement, Fair Trading alleged that a 7 per cent gross rental yield was not achievable for all units in the development, a 'rental guarantee' was not offered to all purchasers and where it was offered, the guarantee was subject to terms and conditions that were not disclosed on the billboards or the brochure.

In May the ABC reported that, despite there being no finalised route for stage two of Canberra's light rail project, Geocon was selling apartments on the claim buyers could walk out the front door, get on the light rail and be in the city "in under 10 minutes".

However those claims have also resulted in action being brought against Geocon and the other companies collaborating on the project.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 17 seconds 17 s An advertisement pulled from the internet showed Geocon boss Nick Georgalis speaking on the project.

The maximum penalty for companies for unconscionable conduct and making false or misleading representations under Australian Consumer Law is up to a $10 million fine or about 10 per cent of a company's annual turnover.

In a statement, a spokesman for Geocon said the company would "vigorously defend" the action in court.

A map showing plans for Stage 2A (in red) and Stage 2B (in blue) of the light rail. ( Supplied: ACT Government )

"The ACT Labor Government won an election of the back off telling the public that light rail stage two was going to Woden, but Geocon is not allowed to advertise this election-winning promise," he said.

"No complaints have been received from any consumer nor has any evidence been provided by the ACT Government that the light rail won't come to Woden.

"Geocon has a notice of decision from the ACT Government stating that the light rail will be stopping on Callum street.

"The DA approval also notes that the road network and subject development will need to accommodate the light rail terminus in the Woden Town Centre."

The spokesman said Geocon's advertising of 7 per cent rental yields were based on past performance.

"Rents in Canberra continue to skyrocket and Geocon develops numerous properties in the ACT that are currently achieving rental yields in excess of 7 per cent," he said.

"Furthermore, Geocon also provided rental guarantees to this effect to ensure the committed outcome.

"The only claims that are false and misleading are the claims made by the ACT Government in these proceedings."

Claims of sexist advertising twice dismissed by adjudicator

In Geocon's sales video, with the campaign tagline "time is luxury", managing director Nick Georgalis described the chance to buy into the Grand Central Towers complex in Woden as "an extraordinary opportunity for Canberrans".

But, at the time, an ACT Government spokesperson said that Geocon had never been briefed about, or given any indication of, the likely outcomes of deliberations, procurement processes or planning approvals.

Ad Standards have twice dismissed complaints about Geocon's depiction of women in its advertisements. ( ABC News )

In the months since, the Government announced it would split stage two of light rail into two parts, with the first — dubbed Stage '2A' — to take light rail from Civic to Commonwealth Park, and '2B' to run from the Commonwealth Avenue Bridge to Woden.

The Government said it hoped to begin construction of Stage 2A as early as next year, with operations commencing in 2023. But plans for 2B remain unknown.

In addition to its claims about travel time connected to its Grand Central Towers development, Geocon has previously attracted criticism for its marketing campaigns, including claims of sexism and objectifying women.

However, Ad Standards — Australia's independent advertising complaints adjudicator — have twice dismissed complaints about Geocon's depiction of women in its advertisements.

Unions ACT recently protested the company after it used an International Women's Day event to spruik sales and launched an online petition calling for a ban on "sexist corporate advertising that objectifies women's bodies".

It prompted the ACT Government to consider introducing new regulations, but Mr Georgalis cautioned that any changes would set Canberra back 50 years.