Saskatoon vacancy rates have held steady throughout 2014, with only slight increases due to new construction and tenancies vacating outdated properties. We break our commercial real estate vacancies into three main areas: Industrial, Retail and Office. Here’s a snapshot on each as of October 2014.
The majority of Saskatoon’s industrial inventory is located north of Circle Drive N and reaches out to Idylwyld Dr in the west and Warman Road in the east. The total inventory sits at a vacancy rate of 5.84 per cent. However, ICR adjusts that rate to 4.92 per cent when it excludes large anomalies in the market.
The average asking rate is $11.70 per square foot. Older, established neighbourhoods with no room for expansion continue to entertain low vacancy rates which include the Southwest (2.24 per cent), Sutherland (1.06 per cent), Agriplace (0.71 per cent) and Airport (0.65 per cent).
Higher vacancy areas such Kelsey/Woodlawn (11.44 per cent) and CN (12.04 per cent) are home to some of those large anomalies. The Northend/Marquis industrial area sits at 8.55 per cent, due in large part to speculative building and subsequent accumulation of inventory.
As is typical for our market, construction is slowing down for winter and it is therefore likely we will see positive net absorption of new product in the north end through spring 2015.
Large development in the retail sector has alleviated some of the undersupply, but the total vacancy rate for Saskatoon’s retail still sits at a low 3.27 per cent. We have seen a few larger tracts of development land in Stonebridge and Kensington open up, but there are no future plans for additional dirt.
The hot spots still have drastically low rates, making it difficult for retailers to break into established neighbourhoods. Areas such as Broadway (0 per cent), University Heights (1.75 per cent), Idylwyld (4.43 per cent), 20th St W (3.87 per cent), 33rd St (3.04 per cent), 51st St (4.09 per cent), downtown (1.74 per cent), 8th St (4.85 per cent), and Blairmore (2.56 per cent) remain popular.
Older and redeveloped product in Sutherland (6.85 per cent) and Circle Drive (5.95 per cent) present great value for retailers who can locate to those areas immediately. Developments springing up in Stonebridge have created a 7.96 per cent vacancy rate, but that is expected to get snapped up quickly.
Saskatoon’s overall office product sits at a vacancy rate of 7.21 per cent. While vacancy rates downtown remain competitive, some of the suburban product is quite high.
The downtown sector vacancy rate is 6.21 per cent overall. That can be split between class A (3.14 per cent), class B+ (1.75 per cent), and class B (6.60 per cent) offices.
The vacancy rate in suburban areas is a slightly higher at 8.02 per cent altogether. These areas have experienced a number of sizable properties come back onto the market that have yet to be absorbed. An inventory of new construction is still waiting to be fully leased as well.
Areas such as Stonebridge (14.90 per cent), West/Other (14.61 per cent), Airport (10.30 per cent), North/Kelsey (10.56 per cent) and Peripheral (14.44 per cent) are at the highest vacancy rates while University Heights (0 per cent), Southeast (3.72 per cent) and 8th St (4.49 per cent) are at the lowest end.
ICR is Saskatchewan’s largest privately owned real estate company with offices in Saskatoon and Regina; as well, the company services Saskatchewan’s secondary markets. ICR specializes in the sales and leasing of commercial property and is known for its expertise in commercial development and re-purposing of existing buildings.
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