Regina’s notoriously tight industrial real estate market has experienced an upward tick in availability.

During the second quarter, availability rose 50 basis points to approximately 2.4% from 1.9% in the same period in 2023.

Lease rates in brand new construction projects are rising and investor optimism for future growth is strong due to Saskatchewan’s abundance of food, fuel and fertilizer, says Avison Young.

Although the bump was marginal, Regina’s availability remains desirable as companies are relocating to upgraded premises and expanding their footprints amidst rising construction costs, according to full-service commercial real estate firm.

The average asking rent also saw a marginal increase year-over year to $11.53 per square foot from $11.51 psf. But, percentage-wise, but lease-rate increases in new construction projects are in the mid-teens and higher.

The city’s code review policy regarding change of use for existing space may further increases.

“This is prompting some tenants to reduce their square footage requirements, ultimately resulting in lower ceiling heights, as smaller square footage spaces generally have lower ceilings,” reported Avison Young.

“In contrast, some landlords are offering increased closing incentives for dispositions, while others are capitalizing on the opportunity to enhance the return on their investments by retrofitting aging spaces to better suit tenants’ needs.”

Many companies are choosing to lease spaces rather than become owner-users in order to dedicate their capital to inventory, operations, and staff to fuel growth.

“This trend continues to drive up leasing rates, with no signs of deceleration on the horizon,” said Avison Young.

During the second quarter of 2024, the average in-city land asking price was $550,000 per acre, and the average sale price was $180 psf.