Regina’s industrial vacancy rate has dropped, but it’s not time to break out the champagne quite yet.
Against a backdrop of struggling commodity prices, the percentage of available space dropped from 3 per cent at the end of the first quarter to 2.8 per cent six months later, according to the latest report from Colliers International.
Paul Mehlsen, managing partner of Colliers’ Regina office, cautioned that the drop was almost entirely due to the leasing of about 52,000 square feet of space at the TransLink Logistic Centre at the Global Transportation Hub to Univar.
Mehlsen said the market has been “softening” slightly for the past couple of years but that shouldn’t be setting off any alarm bells because they’re following several strong years.
“It’s still a good market. If we had these days in the early ’80s, we’d have been very happy,” he said.
Colliers believes Regina’s industrial market will remain stable for the next year but a prolonged economic downturn will likely have a negative impact on vacancy rates and rental rates.
“Older properties will continue to feel the greater pressure as new and redeveloped properties come to the market. We expect to see more firms in the construction industry struggle with the slower economy, which may increase subleasing activity. Nevertheless, first-rate product for sale and lease will continue to attract quality tenants at rates below the boom-time highs,” the report said.