Our construction costs are still 20 or 30% higher for an identically-spec’d building in Vancouver or Toronto,” says Saskatoon developer
Midmarket cities in western Canada have economies that are outperforming those in the major metro markets in the country, and that’s leading to increased demand across all asset classes.
We’re commodity-rich in the west,” says David Dubé, president & CEO of Concorde Group Corp. “That’s driving a lot of capital spending for exploration and development. Cities like Saskatoon, Regina and some of the smaller regional centres in Alberta and British Columbia are seeing a recalibration of real estate markets that were historically depressed for some twenty or thirty years. Some of it’s a correction in the marketplace, but we’ve passed that now to where it’s a demand-driven market that’s driving development.”
Concorde owns subsidiary Biz-Hub Developments, which operates a 500-acre light industrial park north west of Saskatoon. The first phase is already sold out and the company is in the midst of launching the second phase.
Dubé says their success is due to strategic planning for growth over the long term. “There’s been a shortage of big-box development land within the city,” he says. “They didn’t have a ready-for-growth strategy in the can, so city planners are now playing catch-up.”
At the same time, labour shortages are driving construction costs higher than they should be. Dubé thinks a slow-down might be beneficial for everyone. “If demand would plateau for 18 months, I think it would be a healthy prospect for the market.”
Note: This article appeared on p 38 of Canada’s Leading Real Estate Forum Magazine, Winter 2012.
