Ottawa’s downtown vacancy rate rose several percentage points in the fourth quarter of 2013, according to brokerage firm Colliers International, helping to push down rental prices across the city as landlords competed for scarce business.
The vacancy rate rose to 11.1 per cent in the core business district during the period, an increase over the 6.7 per cent vacancy rate Colliers measured during the same time in 2012.
That played a major role in a “substantial increase” in the city-wide rate, the firm’s quarterly report said. It rose to 10.7 per cent from 8.5 per cent in the second quarter of 2013.
Meet the team bringing talent and jobs to Eastern Ontario
The OEEDC has been supporting economic development in Eastern Ontario by putting the region on the map.
An inside look at Ottawa’s office market trends
With organizations standardizing hybrid work, Real Strategy anticipates this reduction in tenant demand to continue.
The brokerage firm said the opening of a new building from Morguard Properties – the Performance Court building, located at 150 Elgin St. – played a big role in the increase.
Even though the building was not entirely open as of the end of 2013, Colliers recorded 150 Elgin as adding 358,214 square feet of space to the market during the fourth quarter.
150 Elgin has attracted class A tenants from other buildings downtown, Colliers noted, decreasing rental rates as landlords competed to fill their vacant spaces. Shopify, the Canada Council for the Arts and Ottawa Tourism are among the tenants in the new building.
The continued downsizing of the federal government has also played a role in increasing the amount of space available on the market, the report said.
“The current vacancy rates downtown are higher than other parts of Ottawa so it’s clear that this submarket is responsible for driving up Ottawa’s overall vacancy rate,” read the report.
Kanata had the highest vacancy rate of the regions Colliers measured, clocking in at 13.6 per cent during the fourth quarter. However, that was still a drop from the 15.6 per cent measured in the same period of 2012.