Saskatoon's entire commercial real estate sector should remain strong this year, according to a forecast from Colliers International, but it is the office market that will lead the pace.
Tom McClocklin, president of Colliers McClocklin Real Estate Corp., said the vacancy in all asset classes will remain low in 2012, rental rates will be stable or even rise and development will continue in industrial, retail and office sectors.
"For the first time in nearly three decades we are entering a major expansion of the office market," McClocklin told an audience in Saskatoon, where he presented Colliers International's 2012 Canadian Real Estate Review & Forecast last month. "Traditionally we haven't been an office city. We've been an industrial and retail city."
New office space being built in the city is barely keeping up with demand, he said.
The downtown office sector had been slow until 2006 when demand and construction began to increase. By 2011 the downtown vacancy rate had fallen to just 2.5 per cent, among the lowest in Canada.
"Demand for office space has been exceptional as existing tenants in Saskatoon require additional space and many new companies related to the resource and engineering sectors locate to our city," McClocklin said.
While much of the city's recent economic growth can be traced to/related to potash mines, McClocklin said there are other factors at play. "We have multiple things driving our economy," he said. "We have agriculture, uranium, diamonds, oil and gas, rare earth mineral plays and potential oilsands development."
– With files from the Estevan Mercury
from Western Investor March 2012
