Nearly a quarter-million square feet of space is set to hit Ottawa's office market over the next six months that could increase the city's vacancy rate by 50 basis points, according to a local brokerage firm.
Cushman & Wakefield Ottawa said the vacated space will be evenly split between the central and west suburban markets, and suggested landlords will face a challenge finding tenants.
“It is highly unlikely that the market will have recovered enough to absorb all of this space,” the firm said in its quarterly market report, released Friday.
The citywide office vacancy rate was 7.3 per cent at the end of the third quarter, down 10 basis points from mid-year. That makes the seventh straight quarter in which the office vacancy rate floated between 7.1 per cent and 7.4 per cent.
Ottawa’s year-to-date leasing total for 2012 is down more than a third from this time last year. Currently at 843,000 square feet, this year’s leasing activity is down 35 per cent compared to last year’s 1.3 million square feet.
The downtown core’s overall vacancy rate declined to six percent, a decrease of two basis points from the quarter previous.
Leasing activity did improve in Kanata, with six transactions that were larger than 10,000 square feet. Aside from the west end and downtown, the majority of transactions were 5,000 square feet or less.
This quarter, the construction of 2611 Queensview Dr. was completed, with Genivar occupying about half of the 85,000-square-foot office building and the other half still available for lease.