According to a new report from ICR Commercial Real Estate, more than 61,000 square feet of Saskatoon industrial space has been absorbed during the first half of the year, nudging the vacancy rate down to 7.8 per cent.
That’s the first period of significant positive absorption in more than four years, said Alvaro Campos, Saskatoon-based brokerage business manager at ICR.
“It’s good news. Our vacancy rate is higher than where it should be for a healthy, balanced market, which is between 5 per cent and 6 per cent. If things continue the way they’re going, it could be two or three years and we’ll be back to a healthy balance,” he said.
That could come even faster if landlords continue to show that they’re willing to provide incentives, such as a free month’s rent, to potential tenants, he said.
When the provincial economy started to sputter a few years ago, there were many industrial projects under way, leading to supply “heavily” outweighing demand, he said.
“Over the last 18 months, we’ve seen very controlled developments. There have only been six or seven building permits [issued] for the first half of the year for the industrial market,” he said.
The opening of the North Commuter Parkway in the fall of 2018 is expected to bring a significant amount of traffic to the city’s two largest industrial centres, the North Industrial Area and the Marquis Industrial Area, Campos added.