New Brunswick’s three largest cities saw their office vacancy rates fall again in 2019, according to the latest rental market surveys from Turner Drake & Partners.
Fredericton saw its vacancy rate drop to 6.7 per cent from 6.77 per cent, while the vacancy rate in Moncton fell to 7.93 per cent from 8.02 per cent.
Alexandra Baird Allen, who manages the Economic Intelligence Unit at Turner Drake & Partners, said Saint John saw the largest drop among the cities.
“They fell over five percentage points from 19 per cent vacancy in 2018 and they are sitting at just 14.07 now,” said Baird Allen in an interview.
Baird Allen said the drop in vacancy rates can be attributed to more demand for office space in the cities.
As for why there is more demand, she said there is an inverse relationship between vacancy rates and the net rental rate.
“Overall, the net rental rates have dropped slightly year-over-year, and that may be in part responsible in generating increased demand,” said Baird Allen.
The net rental rates now stand at $12.81 per square foot in Saint John, $12.84 in Moncton, and $13.78 in Fredericton.
Looking ahead to 2020, Baird Allen said they expect lower vacancy rates will continue, but that will push rental rates up in the shorter or longer term.
She said having higher occupancy rates helps to boost businesses across the board, particularly in the heart of a city.
“You’re drawing people in and you’re having them come downtown — or uptown in the case of Saint John. They’re there working on their lunch breaks, they’re going out to restaurants, they might stop at the retail stores on their way home. You bring vibrancy and crackle to that downtown,” said Baird Allen.
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