Wednesday, July 12, 2006

Kanata Vacancy Rate Continues to Decline

Kanata is the most active office space market in the city, with the vacancy rate falling 1.3 % to 8.0 % in the second quarter.

In its latest report on office vacancies, Colliers International says the overall office vacancy rate in Ottawa in the April-to-June period was 8.8 %, unchanged from the first quarter. As always, downtown space remains the most expensive and the hardest to find, with the vacancy rate at 3.9 % in the downtown core, up from 3.8 % in the first quarter.

Four major office projects are under construction in the downtown core, totaling 757,000 square feet. Four other projects are on the drawing boards, but Colliers says "it is very unlikely that any project will proceed without major lease commitments in place."

But the biggest deals have been in the suburbs, particularly Kanata, where Mitel sub-leased 42,000 square feet at 350 Legget Drive to General Dynamics.

More than 51,000 square feet of space in Kanata was taken up during the quarter, reducing the vacancy rate to 7.9 %. A year ago, Kanata's vacancy rate was 19.1 %.

There is now talk of new development in Kanata as lease rates increase, positive absorption continues, and vacancy drops.


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