The office vacancy rate in Saskatoon is now considered the lowest in North America, falling to 1.91 per cent in the second quarter. There are only 11 office spaces available in Saskatoon’s downtown and none of them are more than 5,000 square feet, according to a report from Colliers McClocklin Real Estate Group.
Four new office buildings with a total of 218,000 square feet are under construction in the city’s central business district, but nearly all the space has been preleased, Colliers note. The largest new building, River Centre with 78,000 square feet of Class A space, is 90 per cent preleased as it prepares to open this fall. Demand is expected to spur construction of three new downtown towers, if development permits are approved, in Saskatchewan's largest city.
Class A space downtown is leasing for $25 per square foot, net, up from $20 a year ago, while Class B space rates have increased from $17 to $2 in 2011 to $20.00 per square foot today. New Class A space is going for from $30 to $35 per square foot, indicative Colliers says, “of escalating land values and construction prices.”
Saskatoon’s small suburban office market is also seeing action, with 76,000 square feet of new space under construction. The suburban vacancy rate is a relatively high 8.85 per cent, but demand for modern space has spurred small-scale speculative developments, Colliers notes.
