As predicted in Q1 2017, the Saskatoon industrial market has exhibited signs of recovery. Due to a limited increase of new supply, stabilization in occupancy, and a significant drop in average net effective rental rates, vacancy has declined for the first time since 2014.
- Leasing activity increased in early 2017 and maintained velocity throughout the summer as the majority of landlords have acknowledged current market conditions and have accepted reduced rates to attract or retain tenants.
- Tenants are taking advantage of market conditions to expand the scope of their operations.
- Despite a number of business closures within the Saskatoon market, industrial occupancy is outpacing vacancy, resulting in absorption exceeding 200,000 square feet in the third quarter.
- A reduction in new development has allowed for a recovery and an overall decline in vacancy.
- Despite more than 63 buildings available for sale with an average asking price of $160 per square foot, only ten buildings have transacted in 2017, one of which transacted twice.