Empty spaces: 'staggering' office vacancy rates in Halifax now rival Calgary
Survey author says the commercial office vacancy rates are 'self-inflicted'
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The amount of office space sitting vacant in Halifax’s central business district is ‘staggering’ and doesn’t bode well for future commercial growth and prosperity in the city’s downtown core.
Those are the findings from a series of surveys undertaken in December and released last week by Turner Drake & Partners Ltd.
“Back in 2009 we did a study for HRM... We warned them in that study that Halifax’s downtown was declining as a commercial centre and would, in our words, become a place to play and stay,” said Turner Drake president Michael Turner.
“We are now five and a half years on and that’s exactly what has happened.”
Turner said while Calgary’s high office vacancy rates are due to collapsing oil prices, Halifax has itself to blame.
“What has really caused the problem is that HRM is in competition with the downtown because they own the industrial parks,” he said.
“By making land available in the industrial parks for office space, they have effectively bled demand away from the downtown because it’s cheaper to build in the industrial parks.”
Turner believes it’s too late to turn the tide. This is the year the province’s working population will start to decline, a reality that will result in even less demand for office space.
Although he agrees the numbers are cause for concern, the executive director of the Downtown Halifax Business Commission is a bit more optimistic.
Paul MacKinnon said Halifax’s office vacancy rates are in part driven by the addition of more ‘class A’ office space (top tier buildings like Purdy’s Wharf and 1801 Hollis St.) currently under construction.
“The ‘class A’ space that’s being built is being driven by a bit of a shuffling of the existing market. That’s not necessarily a bad thing at all,” MacKinnon said. “Those are clients that are downtown and that always want to be downtown and they’re saying we want new space.”
MacKinnon said while HRM’s past approach favoured industrial parks and hurt the downtown by pushing up its commercial vacancy rates, he believes things are changing.
“I think there’s a lot more recognition now in the planning department, at council, certainly with the mayor that a strong downtown is very important and I don’t think that was the sense 15 or 20 years ago,” MacKinnon said.
“The overall positive change that I see is that recognition. I think what we’ll start seeing increasingly are policies that help support that.”