Saskatchewan’s office market has received a major boost with the lease of nearly 100,000 square feet at Canada Life Place in Regina, one of the largest commercial real estate transactions in the province in years.

The deal, announced by D'Arcy Skwara, vice-president with Colliers, marks a significant moment for a market that has faced headwinds in recent years due to remote work trends and shifting tenant demands. The lease signals renewed confidence in Saskatchewan’s urban office sectors, particularly in Saskatoon and Regina.

“It’s quite a big deal for Regina,” said Skwara, who was a panelist discussing the office market at the Oct. 16 Saskatchewan Real Estate Forum in Saskatoon. “It’s almost 100,000 square feet which in that market is quite large . . . which will be good for the downtown, keep more jobs downtown. Good for everybody.”

The tenant is eHealth Saskatchewan, a Crown corporation. Colliers represented the landlord side of the transaction for property manager GWL Realty Advisors. The total space leased was 99,220 square feet in the building located at 1901 Scarth Street.

“There’s potentially more. We’re working on potentially another deal there, but we’ll know probably in the next couple of weeks,” Skwara said, noting the Regina office market has stabilized. 

“It’s going to take a while for it to recover but it’s slow progress. Starting to see some properties lease up and a little bit of growth which is great. In Saskatoon, I think it’s the same too,” he said. “A lot of tenants downsized with work from home (during COVID) but people are coming back to work and they need the space. There’s a trend that way.”

Office "trending in the right direction"

Skwara said the office vacancy rate in Regina is about 13 per cent overall (about 15 per cent downtown). A couple of years ago it was 17 to 18 per cent.

“It’s trending down but it’s taking a while.”

During the Saskatchewan Real Estate Forum panel discussion, Josh Walchuk, partner and senior sales associate, ICR Commercial Real Estate, said the current overall vacancy rate in Regina is 11.53 per cent with downtown vacancy at 15.43 per cent and 5.08 per cent in the suburban office market.

He said the total market size is 7.7 million square feet with 4.2 million square feet in the downtown and 3.5 million square feet in the suburbs.

“Both seem to be trending in the right direction since 2023,” he said, although the last quarter absorption was a negative 8,596 square feet and the 12-month absorption was a negative 60,000 square feet. 

He said average lease rates were $14.97 per square foot in the core and $13.92 in suburbia. 

Walchuk said in Saskatoon the overall market of 7.6 million square feet comprises 3.9 million square feet in the core. The downtown vacancy rate is 16.21 per cent and 8.95 per cent in the suburban market. Absorption in the last 12 months has been 54,000 square feet with lease rates averaging $20.11 in the core and $22.06 in the suburbs.

“The market’s kind of flat right now,” Skwara said during the panel discussion. “There have been signs that things have been improving . . . With COVID in the rearview mirror, there seems to be some more willingness to be back in the office.”

Saskatchewan economy faring well

Blake Zimmer, vice-president, alternative investments, TD Asset Management, said demand for office space, especially in the higher-class categories, will continue and remain stable.

“Everyone is talking about flight to quality and we’re witnessing that,” he said. “With tenants now finally finalizing their return to work post-COVID, the demand for well amenitized space will be a top priority for a lot of the tenants.”

Brent Suer, president, Duchuck Holdings, said Saskatchewan is in a positive economic position these days because of its abundant natural resources.

“There’s a lot of good things happening for our province. I’m very positive,” he said. “There will always be interest in office space and I have quite a bit of it downtown that’s empty, unfortunately, but working hard. But I see it as positive and I think it’s going to continue or get better as we get people back to work.”

In Calgary, the city has introduced an incentive program to facilitate conversions of empty office buildings to residential use primarily but also to hotels and post-secondary institutional space. 

Forecast for Saskatoon, Regina

When asked if this could work in Saskatchewan, Aaron McDougall, the vice-president, leasing at Harvard Developments Inc., said the key is to be in the right location and the building has to be devalued. He noted the incentive program in Calgary is key to making the concept work.

According to the Colliers Q2 office market reports:

• For Regina: “Regina’s office market is poised for steady rebalancing in the second half of 2025. Suburban properties are expected to remain resilient, supported by low vacancy and consistent demand. As construction disruptions ease and support from downtown retail amenities strengthens, the Downtown office sector may begin to see increased activity and renewed leasing momentum. With vacancy rates showing signs of decline, these indicators suggest a positive long-term recovery is beginning to take shape.”
• For Saskatoon it said: “While the Suburban market remains balanced, the Downtown core continues to face high vacancy alongside strong demand for premium space. Overall, the market is adjusting as tenants continue to assess and refine their space requirements."