Alexandra Baird Allen manages the economic intelligence unit at Turner Drake & Partners. (Submitted/Turner Drake & Partners)
Office vacancy is on the decline in Moncton and Fredericton, but the same cannot be said in Saint John.
The city’s vacancy rate climbed to 19.1 per cent in 2018 from 18.74 per cent a year earlier, making it the highest among Atlantic Canada’s six largest markets.
The figures are contained in a new survey released by real estate company Turner Drake & Partners.
Alexandra Baird Allen, manager of the economic intelligence unit, says the Port City has some mitigating circumstances.
“Saint John does not have a traditional office-based economy,” said Baird Allen. “Saint John’s economy has tended to historically be more of an industrial base, which is not a strong office user.”
Baird Allen said another factor is many empty retail spaces from days past have been turned into office space, leading to more supply than needed.
Uptown Vacancy Rate Falls
However, the vacancy rate for Class A space in the uptown — considered the trendsetter of the city’s office rental market — improved slightly to 16.46 per cent.
In Moncton, the overall office vacancy rate fell to 8.02 per cent from 12.74 per cent, making it the largest decrease in the province.
“There was an uptick in the amount of space that was demanded, and there was nothing really significant in terms of addition to supply,” Baird Allen said.
Fredericton’s office vacancy rate also fell to 7.08 per cent, which is the lowest in Atlantic Canada.
Office Rental Rates
The survey also found New Brunswick continues to have the best deals on office rental rates in Atlantic Canada.
Even though Saint John has the highest vacancy rate, it has the second-lowest rental rate at $13.03 per square foot, up from $12.40 in 2017.
“Where Saint John had an increase in demand for Class A office space and a shrinking vacancy rate in Class A, it’s not unexpected to see that rental rate push up a little bit,” Baird Allen said.
Moncton has the lowest rates on average, dropping to $12.93 per square foot from $13.13, while Fredericton’s average rate crept up to $13.95 per square foot from $13.27.
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