The commercial rental market in this city is set to change

The rental market in Canada’s capital is set for a shake-up, according to a new report that shows the office market is beginning to show some signs of recovery.

“We believe that now is a good time for tenants to relocate because the current low net effective leasing rates will likely shrink over the next 12 to 24 months, as the market continues to recover and vacancies drop,” said Kelvin Holmes, managing director, Ottawa Brokerage, for Colliers, which released the report.

“The Ottawa office market continued to be tenant driven in Q1-2015 with tenants taking advantage of low rental rates and high incentives offered by landlords.”

A major influencer in Ottawa's downtown market, according to the report, will be Public Works and Government Services Canada’s announcement of the result of its tender for 130,000 square feet of Class A space.

“Such a large block of space will impact the market in a variety of ways with an announcement expected in Q2-15,” added Holmes.

The Colliers International Q1-2015 Report for the National Capital Region showed that the vacancy rate decreased from 11.3 per cent in Q4-2014 to 11.2 per cent in Q1-2015, which was driven by the decrease in Ottawa’s downtown vacancy rate to less than 10 per cent in Q1-2015 from Q4-2014 (previously 10.2 per cent).

The Kanata office submarket continues to witness a decrease in vacancy because of renewals and expansions, alongside high deal velocity.

Despite the downtown market allure, tenants in Kanata are continuing to renew and expand, demonstrating this market will likely remain stable, and enjoy high demand through 2015.

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