Growing demand in Saskatoon for high end office space

Saskatoon’s skyline is set to see some big changes over the next few years.

The change is mostly due to two new offices towers to be developed in the downtown core: a 13-storey office tower at River Landing and the recently announced $55 million dollar Saskatoon World Trade Centre at 3rd Avenue and 22nd Street.

READ MORE: $50M office tower proposed for downtown Saskatoon

But is there enough demand for office space in Saskatoon to fill these new developments?

“There seems to be a bullish attitude towards being able to fill this space,” Alan Wallace, the Saskatchewan project lead for V3 Companies of Canada, said.

“(The investors) looked at it carefully, they’ve looked at the market, the dollars per square foot and the need in Saskatoon for Class A space seems to be there.”

Wallace is also a former city planner for the City of Saskatoon.

According to ICR Commercial Real Estate Saskatchewan, the vacancy rate for office space in downtown Saskatoon is 15.6 per cent, due to a lack of higher end space paired with higher vacancies in older, less desired buildings.

“Some of that office space that’s there right now is more in that B and C class office space,” Lesley Anderson, director of planning and development for the City of Saskatoon, said.

“They’re not attracting some of the high-level clients that some of the new office space is.”

READ MORE: Office vacancy rates on the rise in downtown Saskatoon

The vacancy rate among Class B space is 25 per cent and among Class C space is 26.2 per cent.

Despite the statistics, downtown is where the city is hoping to keeping major office development. This has prompted officials to focus on cutting red tape as well as the addition of incentives for new builds as well as renovations to existing buildings.

“We’re focused on what are the major barriers, what are some of the things we can change quickly, and how can we make sure that development in the downtown isn’t facing any unnecessary barriers,” Anderson said.

The towers are being considered part of a long list of investments into the downtown core.

“We have been seeing office development outside the downtown and we really think it’s important to keep the larger offices in the downtown,” Anderson said.

“That’s where we have the focus of our amenities that are good for the employees.”

Wallace notes the new Traffic Bridge as another key investment, which is expected to help the flow of people into downtown.

“You have a high quality city when you have a thriving city centre,” Wallace said.

That influx, along with further office development, means further development may be expected in the near future throughout the downtown core.

“We’ve reached what I consider to be peak surface parking, we really shouldn’t and can’t provide parking in that way anymore,” Wallace said.

“We have to learn to park our cars up and maybe even a BRT (bus rapid transit) type transit system will really help that.”

READ MORE: Saskatoon city council to award $3M contract to plan rapid transit system

Experts say it’s common for more development to happen during times of economic uncertainty.

“During a downturn is not a bad time to consider building,” Wallace said. “Trades are more available, costs a little lower, and materials are more available.”

Neither building is expected to open before 2019, which has many feeling confident an economic rebound is in the cards before then.

“Saskatoon appears to have a lot of diversity in its economy,” Wallace said.

“It’s just a matter of time before these buildings are full.”

One tenant has been secured so far for the new developments.

On Monday, it was announced that MLT Aikins LLP, a well-known law firm in Western Canada, will be a tenant in the east tower of River Landing.