Vacancy rates are relatively stable and absorption continues to be positive in Saskatoon’s leasing markets. ICR has recently completed a yearend wrap which includes a forward look into 2014 for our office, retail and industrial sectors.
There has been a distinct move to suburban office demand with 126,100 sq.ft absorbed in 2013. Vacancy in downtown Class A increased dramatically as several larger tenants moved out of the core, leaving an overall downtown vacancy rate of 4.83% up from 3.53% at the end of 2012.
Retail, Industrial demand strong; Office cools
Retail space continues to be a scarce in Saskatoon. For the 7th year in a row, our vacancy has remained below 3%. This continues to illustrate that we have among the lowest retail vacancy rates in Canada.
Despite the lack of available product, national and international retailers continue to consider Saskatoon to enter the market or expand.
The University of Saskatchewan published a retail report mid-year that indicated the municipality was underserved by approximately 600,000 sq.ft. Proposed projects over the next 12-18 months will help answer that need with around 310,000 sq.ft. of planned new development.
The industrial market, on the other hand, has plenty of inventory to sustain us for the immediate future. With a 6.04% vacancy rate, approximately 429,615 sq.ft. was added in the past year. There is another 260,900 sq.ft. under construction; 77% of that inventory is to be located in the north end of Saskatoon within the Marquis Industrial area.
With an absorption of 509,300 sq.ft. in 2013, there is still an incredible appetite for this type of product. Industrial condominiums flooded the market in the first half of 2013 but 56% of this product was absorbed by year end.
The last City of Saskatoon land tender was issued in September, 2013. Prices ranged from $424,000-$485,000/acre. The next tender is anticipated for early 2014 with reserve bid prices starting at $500,000/acre.
Posted by Kelly Macsymic