-- Government’s relocation to the suburbs challenges landlords of Class C buildings; trend presents potential to transform city core into mixed-use vibrant hub --
Ottawa, May 1, 2013
– While the first quarter of 2013 was relatively uneventful for Ottawa’s office market, with vacancy rate inching upward by 10 basis points to 8.6 per cent and average rental rate remaining flat at $18.11 per square foot, changes are brewing beneath the surface according to the Colliers International office market report released today. Tenants already located in the Core have been focusing on “right-sizing” their facilities, leveraging new office space design, technologies and telecommuting to maximize efficiency and reduce the size of their office footprints.
Furthermore, as Class A and B buildings still retain a solid prospect, the ongoing exodus of the Federal Government from the Core Business District to the suburbs has put pressure on vacancy rate, forcing it up by 20 basis points to 6.9 per cent the past quarter. This trend drives Class C building owners in the downtown core to a crossroad.
“The departure of an anchor tenant such as the government from Class C buildings is definitely worrisome, but at the same time, it presents an opportunity for repositioning these assets into a lucrative niche market,” states Kelvin Holmes, Managing Director with Colliers International in Ottawa. “With the right capital investment, these buildings can even challenge Class A office towers by transforming them into mixed-use condominiums that attract people to the downtown where they can work and live. This repatriation trend has already begun and bears the potential to change the fabric of the city from a sleepy bureaucratic downtown into a vibrant and lively hub where Ottawa lives, works and plays.”
Ottawa Vacancy Rate
“Talks of building a casino in Ottawa, along with the progress made on the light-rail and public transportation front, are also backing the prospects of Ottawa to become a “little Manhattan” in the future with its own entertainment district,” says Holmes. According to Colliers International’s analysis, the Lebreton Flats are likely to be a front runner for the project, thanks to its proximity to downtown and public transportation access.