City government still at a loss on how to deal with glut of empty office space
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Offices in the energy capital of Canada continued to show near-record levels of vacancy despite the steady recovery of the oil and gas sector.
In a report by Altus Group, approximately 23% of office space in Calgary remained empty in the first quarter of this year, up from 20% during the same time last year. Some of the increase can be attributed to the completion of 2.5 million square feet of office space during the quarter, Altus said.
Sluggish demand also contributed to the malaise, Bloomberg reported. Sales of office investment properties dramatically fell by 83% year-over-year in Q1 2018, and overall investment-property sales shrank by 28% during the same time frame.
Along with empty offices, the city is also struggling with the effects of severe unemployment.
“Although we have had strong GDP growth last year, and modest GDP growth predicted for the next couple of years, we still have some big economic issues,” Calgary Economic Development president and CEO Mary Moran told CBC News earlier this month.
Read more: Alberta’s recovery will owe a lot to the commercial segment – observers
“We still have 13 million square-feet of office space available, and we still have the highest unemployment in the country.”
Moran noted that not even the resurgent energy sector can help maximize this unused space, instead suggesting that Calgary take notes from Toronto and strongly encourage innovation firms to set up shop.
“[Energy companies] are operating at a much more efficient and effective rate so they are not going to add people and absorb office space like they have in the past. They are going to be cautious. We don't see them as the big job creators that they have been in the past,” Moran explained.
“We have a favourable immigration policy so we can continue to attract really smart people from around the world,” the executive added. “We need to make sure we have an educational and post-secondary pipeline that is wider than it's historically been in producing people with those skill sets, particularly around software engineers, data scientists, coders and programmers.”
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