-- Rising lease rates, increased demand for office and retail space along the new line route, and migration of high-tech companies from the fringe are likely scenarios --
Ottawa, March 11, 2014 – The completion of the new Confederation Light Rapid Transit (LRT) project planned for 2018, connecting the east and west ends of the city with its core, will spark a few interesting trends that will impact the city’s commercial real estate markets in the downtown core and suburbs. According to a new report and analysis released today by Colliers International, office, residential and retail properties along and in proximity to the new line are expected to see some upward shift in demand and, as a result, in lease rates due to the anticipated increase in traffic.
The new LRT line is also likely to impact Ottawa’s largest office tenant - the Federal Government - which may prioritize leasing office spaces that are close to and along the new public transportation line.
“Although Ottawa’s downtown core is already condensed with very limited opportunities for new developments, the availability of a new transit line that brings riders from both ends of the city is going to have an impact on the area,” says Kelvin Holmes, managing director with Colliers International in Ottawa. “Beyond the expected rise in demand for office, retail and some residential space along the route, the new line can spur small businesses in the fringe market to re-evaluate their future locations as employees’ commute from and to the suburbs will become shorter and more efficient.”
But not everyone is going to be able to leverage and enjoy the fruits of the new LRT. According to Colliers’ analysis, the Confederation Line working in full capacity should have a positive impact on traffic congestion into the city. This would put a downward pressure on parking lot operators, as the supply and demand curve is likely to shift as a result. Other affected stakeholders include class B and class C building owners whose properties are located further away from the line’s route, as they are likely to see a decrease in demand for office space.
> Download full report in Market Insights section.