A recovery in Saskatoon’s commercial real estate market in late 2018 has carried over into 2019.
The vacancy rate for industrial space continues to decline, according to a new report released Tuesday by Colliers International.
“Saskatoon has seen a soft industrial market over the past few years,” said Richard Jankowski, managing director of Colliers in Saskatchewan.
“(Tuesday’s) report shows the market is returning to balance with a record number of sales and a significant fall in the vacancy rate.”
The city-wide vacancy rate decreased by 1.09 percentage points to 7.02 per cent for the first three months of 2019, the lowest rate since late 2017, Colliers said.
Although it is still a tenant’s market, Colliers said there is a shortage of traditional warehouse between 8,000 and 10,000 square feet.
Colliers noted they expect growth in owner-user construction as the market moves toward a healthier balance.
“It is interesting that the majority of sales were of properties to user-owners, a trend we expect to continue throughout 2019 as the market continues to absorb properties built in the boom years,” Jankowski said.
Colliers believes the upswing in large building sales is the result of owner-users taking the opportunity to expand while prices are low.
Introduction of legislation at the beginning of the year requiring tenants to write-off the entire lease on the year it is signed may also have contributed to the upswing in sales, Colliers said.
The City of Saskatoon issued an estimated $5.7-million worth of industrial building permits in the last quarter of 2018 and the first three months of 2019.
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