High-performing strip malls are helping Regina’s commercial real estate market weather the commodity-induced storm, according to a new report from Re/Max.
The entire real estate sector has remained fairly stable throughout the year with demand for multi-tenant retail properties, multi-family apartments and industrial properties leading the way, the report said.
Mack MacDonald, a Regina-based commercial real estate broker with Re/Max, said the biggest opportunity in the city is for buildings that could be owner-occupied because there isn’t a lot of new land being developed these days.
“A building might sell for $1 million as an investment but it could be $1.2 million or $1.5 million if it could be owner-occupied,” he said.
There is always a market for any property catering to the multi-family market, he said.
“If you have a good building and it has a good track record, there’s a market for it,” he said.
Much of the demand for the city’s commercial property is coming from newcomers to Regina, including immigrants from China, Korea, eastern Europe, the Middle East and South Asia, as well as former Regina residents coming back from within Canada, most notably from Alberta.
But until the potash and oil sectors rebound, Regina is unlikely to experience any significant economic growth, MacDonald said, noting agriculture has been the key sector picking up the slack the last two years.
“The city is definitely going to boom again, or at least increase loudly,” MacDonald said. “There is a cautious optimism here. We’ve had a lot of growth the last few years but most of it was catching up to the rest of the world.”
Regina’s retail vacancy rate is a healthy 3.1 per cent with about 53,000 square feet of new space coming to the market this year. Asking lease rates start at as low as $12 per square foot in older strips and strolls, but average in the mid-$30 per-square-foot range in new centres, such as Grasslands, reports ICR Commercial.