That muffled sound you hear is players in Saskatoon’s industrial market holding their breath in the hope that 2017 will finally be the year of recovery.
The sector has been in the doldrums for three years but a new report from Colliers International paints a more positive picture.
There was 328,000 square feet of net absorption in the first quarter of 2017; the vacancy rate fell to 7.6 per cent from 8.6 per cent, but rental rates dipped to $9.50, from $10.
About two-thirds of the quarter’s net absorption can be attributed to a single transaction: the sale of a building to the Brandt Group of Companies.
“It has been a supply-and-demand issue,” said Tom McClocklin, Saskatoon-based president and managing director at Colliers International. “We’ve had more supply than absorption. We see the supply side slowing and the demand side has picked up a bit.”
In order for the market to truly get out of the woods, McClocklin said continued absorption will be key as there is still 1.75 million square feet of vacant industrial space available in town.
“We continue to see positive absorption, either with new ventures taking on larger spaces. That’s more than just pricing, that’s the demand side coming back,” he said.
“The outlook is more positive. I don’t think it’s full-out optimism; it’s more cautious optimism. We’re on the right track.”