I enjoy capturing a positive Saskatoon commercial real estate story when they surface. Our recently released 3Q17 retail survey provides me that opportunity. After two quarters of negative absorption, retail vacancy has decreased by 20 basis points to 4.1 per cent.
Due to continued population growth and expansion of new neighborhoods, we see a healthy amount of new retail development for the Saskatoon metropolitan area in coming years.
The quick facts
The overall average net rental rate is $22.82 per square foot (PSF) and occupancy cost is $8.03 PSF.
Confederation Park and Circle Drive compete for the lowest vacancy rate, each reporting 2.6 per cent. It’s interesting that Circle Drive’s average net rental rate of $17.17 PSF foot is lower than Confederation Park’s $20.69 PSF.
The most vacancy can be found on 33rd Street which has increased to an astounding 22.3 per cent. It’s not surprising the lowest rate can be found there at $11.42 PSF.
You would expect to see the highest rental rate within new subdivisions where the most current cost of construction is reflected. An example is Stonebridge where we report an average of $31.00 PSF net which in most cases would be for shell space.
A report just released by The Real Estate Investors Network, states Saskatoon should outperform other Western Canadian cities over the coming five years beginning in 2018.
It reads, “Saskatoon’s history as an agricultural centre is being overshadowed by growth and diversity in many other sectors, such as energy, finance, healthcare, insurance and real estate.”
“This growth and stability, along with relatively affordable housing options, makes Saskatoon a prime location for businesses and families – and that is good news for homeowners as well as investors looking to start or grow their portfolios.”
The economic picture in Saskatchewan
In its September provincial outlook report, RBC predicts our province will see GDP growth of 2.7 per cent in 2018.
That would put us in second place, only behind Alberta by 0.1% and result in a significant increase from their forecasted 1.4 per cent this year. The current provincial unemployment rate of 6.3 per cent is forecast to drop to 5.9 per cent in 2018.
A detailed copy of our retail survey is available by contacting me: barry.stuart@icrcommercial.com
