Regina office market report

Key trends

Decreased vacancy rate

As the pandemic labour model continues to drive vacancy into a tenant-favoured market, optimism remains questionable for Regina's office sector. However, the market experienced a decreased vacancy rate of 15.5% Q1-2024 (a slight 2.25% decrease from 17.75% Q1-2023 year-over-year).

This is positive news for Regina as we are below the national office vacancy rate of approximately 19.4%. Unfortunately, Regina is still above an acceptable normal rate.
 

Lease rates steady

Average lease rates are steady with vacancy rates remaining high. Class A space rates range from $22 to $34 psf, with a low vacancy rate of 8.8%. This is due to minimal supply with no signs of new construction on the horizon.

Class B space rates range from $14 to $20 psf with increasing opportunities for square footage supply from a vacancy rate of 18.2%.

Similarly, across the country, Regina's Class C leads all classes with the most distressing vacancy rate of 20.4% with its space rates ranging from $12 to $19 psf.Lowering these vacancy rates is lamentably hindered by flight-to-quality and landlord incentives.
 

Reducing vacancy rate
 

To reduce vacancy rates to an acceptable normal rate, the return-to-office working model needs to gain more momentum with employers who are still on the fence. On the other hand, converting or retrofitting vacant office space to residential rental units is an option that would take some vacant spaces out of office inventory.

Beneficial outcomes of this are, lower office vacancy rates and increasing availability of residential rental units. This option is viable with the help of a conversion incentive program like that implemented by the City of Calgary.

It remains to be seen if the City of Regina will follow suit and implement its own conversion incentive program. This would specifically incentivize the conversion of vacant office space into residential rental units.

Optimism would spring into the Downtown Core with additional civic spillover benefits. These benefits include an increase in population density, and safety and economic activity that would build on the City's Revitalization Initiative for a vibrant Regina.