I’m not much of a gambler, but I’m game to make a few wagers on the immediate future of commercial real estate in Saskatoon. I still thinking putting money in our market is a safe bet but there are some important items to consider.
Industrial absorption is on its way up
Industrial construction slowed in 2015 and absorption is on its way back. There seems to be a pattern in this sector with a seesaw of supply vs. demand.
Rates have not dropped dramatically, though landlords with long term vacancies are now more aggressive with their leasing incentives. I would expect to see more of this throughout the year as vacancy diminishes further.
Office vacancy is in for a long haul
The office market has taken a hit between 2015 and the first part of 2016. There may be more vacancy to come yet given the current rumblings within the world economy.
The good news is there is not much new construction currently in the ground and there will be good options when office users come back to the market. Tenants in a position to renew could get some attractive terms given the current climate. Now is the time to lock in those deals, both for the sake of landlords and tenants.
Retail will continue to soar
ICR agents that attended the annual ICSC (International Council of Shopping Centers) conference in Whistler in January say that national retailers continue to have an interest in Saskatoon.
That said, can we please put the conversation to bed regarding IKEA? We have lots of other great opportunities coming to our city to be excited about so why worry about what isn’t.
Is there a shift in the political wind?
A political change in Saskatchewan would certainly shake things up in commercial real estate. I would place a low wager on a major changing of the guard in Saskatchewan. I don’t believe Alberta’s “never say never” shift will be a reality here.
The Saskatchewan Party continues to create good business policy that will positively impact our economy. While they may have stumbled in other areas, I still strongly believe they are the best option to grow the province.
I welcome any feedback you may have on my upcoming predictions. Where do you think my odds will land?
Posted by Kelly Macsymic