By Ozzie Jurock
Once off the radar of most national real estate companies, Saskatoon's office market is now being hailed as the 'best deal in the country' compared with other Western cities.
And, at an average of $20 per square foot including rent, taxes and operating costs Saskatoon has the most affordable downtown office space in Canada according to Colliers International.
Colliers is forecasting that Saskatoon office rates will rise sharply this year to be "more in line" with Calgary, at $60 per square foot for Class AAA space.
Demand for office space is growing in Saskatoon, with the current vacancy rate downtown at 5.1%, the lowest on record. According to Colliers, two new towers may be announced this year, the first in decades.
Meanwhile, Saskatoon's industrial vacancy rate is expected to plunge to 1.3% this year, down from 3.2% at the end of 2007.
The Conference Board of Canada has ranked Saskatoon as the eighth fastest growing urban economy among the 20 biggest census market areas in Canada.
Saskatoon is benefiting as Saskatchewan is in a boom mode, led by surging potash production and an accelerating housing market, according to BMO Financial Group.
"Growth expanded in Saskatchewan to approximately 5%, almost twice the national rate," said Douglas Porter, an economist with, BMO Capital Markets. "We anticipate continued strength for the province, with another above-average performance of 3 per cent expected in 2008."
BMO notes that, after losing people to other provinces for two decades, the province netted more than 9,100 inter-provincial in-migrants in 2007, the largest tally since 1961.
Consumer spending is on a tear, with retail sales up 12 per cent -the strongest in the country.
As for housing, "Look for another strong year of new housing construction in Saskatoon for 2008," according to CMHC. Builders have the largest number of units now under construction in decades. "On the resale side, listings remain at all-time lows and strong demand persists, suggesting rapidly escalating prices in both 2008 and 2009," CMHC analyst Paul Caton told a recent housing conference.
The above fine forecasts notwithstanding ... JREI has the caution flag still up over Saskatoon. Like Edmonton it has seen a lot of outside speculation ... which may have a similar outcome ... as in down ... regardless of the fundamentals.
Published in the Vancouver Sun, Thursday, May 01, 2008
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