With a vacancy rate nudging 14 per cent and new space coming to the downtown, Regina office landlords are trimming rates and offering incentives to keep buildings full. Some industrial landlords are following suit.
“Some landlords have introduced discounted rates in order to be competitive within the market,” said Alvaro Campos, research analyst with ICR Commercial’s Regina office.
Campos noted that the completion of both Agriculture Place and the final phase of Harbour Landing Business Park will likely keep new office development at bay.
“Other proposed projects continue to be placed on hold,” he said.
The majority of rates have held steady, however, as most landlords prefer to offer tenant inducements to attract interest to their property. Competitive rates range from as high as $25 per square foot for Class A office space to as low as $15 per square foot for Class B space.
“With the economic slowdown anticipated to continue well into the latter months of 2017, vacancy is expected to continue to hover in the mid-teens,” according to ICR.
The downtown office market is facing a double whammy: less demand from resource-sector tenants and a reduction in government-leased space.
The industrial sector is also feeling the pain. The vacancy rate has spiked t 5.6 per cent, up from 3.1 per cent two years ago.
The significant rise in vacancies can be attributed to large spaces returning to the market, coupled with the economic slowdown persisting in the oil sector, ICR explains.
One of the most notable listings recently introduced is Titan Business Park, with 176,000 square feet of space. The 33-acre property, formerly owned by Sears Canada, was purchased by Hungerford Properties, which is reconfiguring the space to provide units of 12,000 square feet and larger in a multimillion-dollar redevelopment.