4Q15 Regina Office Survey

2Q16 REGINA, SASKATCHEWAN
OFFICE SURVEY
SURVEY HIGHLIGHTS
Market activity gathers pace
Lease rates remain relatively stable, landlords more willing to provide tenant incentive
INTEGRITY
COMMITMENT
RESULTS
OFFICE SURVEY 2Q16
ECONOMIC OVERVIEW
As a major oil-producing province, Saskatchewan has been negatively
affected by the drop in oil prices. Although greater economic
2014
2015F
Real GDP (%)
1.9
(-1.1)
(-0.2)
negative shock in the province, it did not prevent GDP growth in
Unemployment Rate (%)
3.8
5.0
6.7
Saskatchewan from declining by an estimated 1.1% in 2015. Low oil
Employment Growth (%)
1.0
0.5
(-1.4)
Retail Sales (%)
4.6
(-2.9)
(-0.2)
Consumer Price Index
2.4
1.6
1.8
8,257
5,149
4,900
diversification compared to Alberta and Newfoundland and Labrador
(Canada’s other major oil-producing provinces) has helped temper the
prices and attendant reductions in capital expenditure within the
province’s energy sector are expected to continue to weigh on growth
this year and result in overall GDP declining again in 2016, albeit
marginally by 0.2%. The projected recovery in agricultural production is
the main factor preventing a more significant drop in activity in 2016.
Housing Starts
2016F
Source: RBC Provincial Outlooks
MARKET OVERVIEW
Competitive Market
The city’s office market has gathered pace as vacancy decreased
The final phase of development at Harbour Landing Business
by 240 basis points to 10.8 per cent through mid-2016. This
Park is well underway. The initial three phases have been met
decrease in vacancy brings year-to-date absorption to 108,000
with healthy demand, and interest in inventory in the final
SF.
phase is expected to gather pace in the coming months.
The city’s office market is prone to fluctuation due to its
Despite the recent increase in available space, asking lease
relatively small size, a trend present in the early portion of this
rates have remained relatively stable. Rather than decreasing
year. The introduction of 160,000 SF of new Class A office
lease rates drastically, landlords have sought to be more
inventory at Agriculture Place has generated positive absorption;
competitive via tenant inducements. Asking lease rates range
this development reveals strong demand for new inventory as
from $36.00/SF for new Class A office space to $14.00/SF for
the building is currently 80 per cent leased.
existing Class B space.
Downtown Regina
OFFICE SURVEY 2Q16
MARKET FORECAST
COMPETITVE OFFICE MARKET
Despite the increase in absorption, demand for office space is
Defining Competitive Vacancy:
Buildings that are more likely to have vacancies, have
non-government tenants, and provide a real representation of
vacancy rates in the office market are grouped in the
"competitive" category. The competitive downtown market consists
of buildings within the downtown core that have been classified
within Class A through C inventory.
anticipated to remain relatively cool. A weakened economy has
softened office demand in various resource-based economies,
a trend present in Regina as well. With an abundance of new
inventory introduced since 2012, future development is
projected to be restrained until more vacant inventory is
absorbed. Although various new development and redevelopment projects are expected to be introduced in the
coming years, these projects will likely remain on hold until the
economic climate stabilizes.
COMPETITVE DOWNTOWN VACANCY
17.30%
10.65%
8.30%
Class A
Class B+
Class B
Proposed - Brandt Place
Competitive
Vacancy
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2008
2009
2010
2011
2012
2013
2014
2015
2016
OFFICE SURVEY
FOR LEASE: 3831 Albert Street
FOR LEASE: 2311 Victoria Ave East
Office Ratio
Competitve Office Vacancy
FOR SALE: 1042 Albert Street
FOR LEASE: 1835 Scarth Street
FOR LEASE: 3831 Albert Street
FOR LEASE: 1055 Park Street
840 48th St E
Saskatoon, SK S7K 3Y4
306.933.2929
275 1st Ave N
Saskatoon, SK S7N 1X2
306.664.6116
www.icrcommercial.com
374 Albert St
Regina, SK S4R 2N7
306.721.6116