Office rental rates across Saskatoon decreased slightly in Q4, driven largely by the continued high vacancy rate in the downtown core. Between Q3 and Q4, net asking rental rates declined 11% and 2.5% for the Downtown and Suburban markets, respectively.
- An emerging trend in the Downtown market has seen landlords preferring full building occupancy in place of higher lease rates, while tenants have increasingly shown preferences for relocating to spaces in high-rise towers over renewing leases in low-rise buildings – a trend that began earlier in 2022.
- The Suburban market is proving to be healthier in general, with vacancy rates sitting at 7.1%, compared to 18.4% in the Downtown market.
- Saskatoon City Council recently approved the location of a new downtown arena, set to be built on the current site of a surface parking lot, north of Midtown Plaza. The arena, in conjunction with the construction of a new central Library and plans for a rapid transit bus system, is bringing future optimism for a revitalization of the downtown core over the next decade.