The region benefits from the fundamental robustness of the industrial asset class
Attesting to the fundamental strength of the asset class, the Regina industrial market continues to see low vacancy rates and steady demand, according to Avison Young.
Vacancy levels have trended downward over the past few years, registering at 3.23% in Q4 2021 and at 1.88% in Q4 2022.
“This is forcing landlords and tenants to adjust their expectations by either retrofitting old spaces or building new ones to meet market needs,” Avison Young said.
The only area in Regina that saw a higher vacancy rate on an annual basis was Ross Industrial Park East, which posted 0.82% vacancy in Q4 2021 and 2.3% in Q4 2022.
In contrast, the Global Transportation Hub has proven to be a crucial focus of market dynamism.
“Vacancy increased from 0.07% in Q4 2021 to 1.48% in Q4 2022, whereas the asking lease rate decreased from $25.80 psf in Q4 2021 to $9.97 psf in Q4 2022,” Avison Young said. “This is a newer area with few buildings; the lower asking lease rate this year is for smaller units inside the Global Trade & Exhibition Centre whereas last year’s $25.80 psf came from larger buildings with single or few tenants.”
Still, overall asking lease rates have dropped by $1.10 psf on an annual basis to $11.50 psf in Q4 2022.
“One sector that saw an asking lease rate increase is the RM of Sherwood,” Avison Young said. “This is likely due to more people looking to build outside the limits of the city of Regina to meet their needs during this time of low availability.”
