The Regina commercial real estate market has been witness to steady property value growth for the past three years. Investors discovered Saskatchewan as an undervalued market in which value "catch up" was inevitable. Analysts across Canada have agreed that many factors will make Saskatchewan a sure bet on terms of economic growth and resulting value enhancement in commercial real estate. Driving factors will be growth in the commodity markets, including oil and gas, potash, uranium, diamonds, ethanol and bio-diesel as well as the old standby, the agricultural sector. Saskatchewan remains an oasis amidst the global economic storm. Look for Saskatchewan to remain at the top in economic growth. The availability of capital along with a positive investment climate makes Saskatchewan "The place to be".

Office Market

The Regina office market has a historically low vacancy rate, below 2% in most asset categories.  The construction of Hill Tower #3 will add 200,000 sq.ft. in 2012.  Construction has started on an 80,000 sq.ft. downtown office building, and plans are in the process for a major new class “A” office development downtown which would be Regina’s largest office tower.   There a few other smaller projects in other parts of the city, and this is a testimony to the market’s strength.

Rental rates continue to rise as the difference between new construction and the existing shrinking supply becomes more apparent.  Look for continued strength into 2012, and rates to stabilize in 2013.

Industrial Market

The Regina industrial market is beginning a marked change as a result of the investment in the intermodal project on the city’s west side.  The CP rail yards will re-locate to this area.  Westfair Foods have completed phase 1 of a one million square foot facility; with over 300-400 new jobs being created with this project alone.  A number of other large distribution companies are moving into the area.  The surrounding lands will attract those who will support the intermodal.

The City is now in a development phase with new construction industrial lease rates at $12.00-$13.00 per square foot.  Industrial lease rates remain strong with rates approaching $10.00 psf for warehouse space and $12.00 psf for industrial office space.  Land prices remain steady in the range of $250,000/acre with poor supply.

Investment Market

The investment market remains very strong with good quality investment properties in short supply. The performance of the Saskatchewan market in light of the recession has resulted in a steady demand for this type of product.  CAP rates that are sub 8% are not uncommon for quality properties that are well located and well tenanted.

Retail Market

The strong Saskatchewan economy has proven to be a real positive for the Saskatchewan retail market.  The Grasslands project in the southeast corner of the City is an exciting new development that will shift the retail and will attract new and exciting retailers to the City.  Modest growth in the east and northwest sectors will continue with all other areas maintaining both lease and vacancy rates.  Rental rates above $30.00/psf are in place for prime retail locations.

Rural Market

Interest in agricultural land in Saskatchewan has risen steadily for the past three years. Increasing commodity prices have led to increased demand for rural land. Diversifications including crops for ethanol and bio-diesel have further fed the demand for rural real estate. Look for values to increase as investors from outside Saskatchewan view the potential of this province. Worldwide demand for agricultural products will foster continued growth in 2012.

Global Market

Building on the power of our network, NAI Commerical is able to give a complete global perspective to the commerical real estate market. Through our association with NAI Global we have the 2010 Global Market Survey Report available. Download it here (4M)

Prairie Provinces Quarterly Report. Available here