Moncton Has The Lowest Office Vacancy Rate In Atlantic Canada
MONCTON– Office vacancy rates have lowered in New Brunswick overall, according to the latest survey numbers released Tuesday by real estate company Turner Drake & Partners.
The total office vacancy rate for Fredericton, Saint John and Moncton edged down from 12.43 per cent in June 2018 to 11.28 per cent. The decreases in vacancy for both Fredericton and Moncton were sizable enough to negate the increase in Saint John.
Moncton saw the biggest drop, and now has the lowest vacancy rate in Atlantic Canada, at 7.96 per cent, edging out Fredericton’s 8.04 per cent. Saint John, at 18.26 per cent, has the highest of all markets surveyed in June, joining Halifax (14.62 per cent) and St. John’s (17.64 per cent) in double-digit territory.
For the survey, Turner Drake had a team of trained researchers collect rental, operating expense and vacancy data for 163 office buildings, some as small as 5,000 square feet, with an aggregate rentable area of almost 8 million square feet.
Fredericton’s overall vacancy rate dropped for the third year in a row, from 8.28 per cent in June 2018 to 8.04 per cent in 2019, the lowest it has been in the past six years. Moncton saw the largest decrease in the province, from 11.89 per cent to 7.96 per cent over the same period. Saint John lags behind, edging up from 16.60 per cent in 2018 to 18.26 per cent in 2019.
Turner Drake also categorizes office buildings by class. Class A buildings command the highest rents in their community and have distinctive design and lobbies. Class B buildings offer “no frills” modern, air-conditioned space. Class C buildings make up the remainder of the office rental market.
In uptown Saint John, Class A office vacancy fell for the second year in a row, from 17.41 per cent to 16.27 per cent. Fredericton’s downtown Class A is balanced as it dropped below the 5 per cent mark, from 8.14 per cent to 4.91 per cent. Moncton’s downtown outperformed all other major cities in Atlantic Canada, with Class A vacancy plummeting from 8.49 per cent to 3.57 per cent , which is considered to be effective full occupancy.
New Brunswick’s success is accompanied by the best deals on net rental rates in Atlantic Canada. Overall average net rents in the three cities are all below the $14 per square foot mark. Moncton has the lowest rates on average, dropping from $13.05/ft.² in 2018 to $12.84/ft.² in 2019 ($14.06/ft.² for downtown Class A). Average rents crept up year-over-year in each for Saint John, from $12.78/ft.² to $12.94/ft.² ($15.83/ft.² for uptown Class A), and Fredericton, from $13.68/ft.² to $13.84/ft.² ($16.14/ft.² for downtown Class A).
Elsewhere in Atlantic Canada, the average rate in Halifax sits at $14.08/ft.² and St. John’s is at $19.05/ft.².