The arrival of Prairie Harley-Davidson is part of 131,000 square feet of new industrial space – combined with a further 154,000 square feet under construction and higher lease rates – that has revved Regina’s industrial real estate action.
Other recent arrivals in Regina included new space for Canada Post at the Regina airport and a new complex for plumbing giant Emco.
Regina is marked not by speculative construction but industrial space delivered built to suit for users, noted Colliers International in a first quarter (Q1) report.
The new inventory, however, has meant the vacancy rate fell to 5 per cent in Q1, down slightly from the end of 2019. The average industrial lease rate is $10.86 per square foot, but this varies across he capital city region.
ICR Commercial Real Estate in Regina reports that small bays and flex buildings have the highest rents, averaging between $14 and $15 per square foot. Larger spaces, located primarily in the Tuxedo and Ross industrial areas, had asking rates that average $10.57 per square foot. Rental rates for older buildings ranged from a low of $7 to a high of $9 per square foot.
As is being seen across Canada, Regina industrial landlords should not be too fearful of the pandemic.
“The percentage of rent relief requests from industrial tenants is far less than tenants from the retail and office sectors,” said.Barry Stuart, managing partner and senior sales associate with ICR Commercial.
Colliers added that logistics and warehouse space are Regina’s bright lights because of rising demand for e-commerce.
While industrial land transactions have slowed one new sale, in the Parker Industrial Park, was seen in Q1 2020. Over the last two quarters, prices for Regina industrial ranged from a low of $43 per square foot for older properties to $192 per square foot for new, high-quality projects, Colliers noted.Industrial land prices have held steady at $189,000 per acre over the past 12 months.
The overall Saskatchewan real estate market is experiencing a slowdown due to the economic impact of COVID-19, Stuart cautioned, and Regina is no exception.
“The next quarterly report should reveal a clearer picture of the market trajectory,” he said.