Halifax Sees Increase In Office Demand And Downtown Activity
HALIFAX — Two new reports show Halogonians are returning to their work and social lives faster than in many other Canadian cities. In fact, Halifax is the only Atlantic Canadian city where the demand for office space has recently grown.
One study on office and warehouse demand was done by Turner Drake. It shows that, in the past year, demand for office space has grown by 1.5 percent, while the five other cities surveyed saw a decrease. Halifax’s office vacancy rate now sits at 14.4 percent.
In New Brunswick, some cities saw drastic reductions in office demand over the past year. Saint John is now the only Atlantic Canadian city where office vacancy is more than 20 percent, jumping more than two percentage points in the past 12 months.
In Fredericton, the vacancy rate for offices skyrocketed from 9.5 percent to 16.8 percent. Moncton also saw a significant decrease in demand and an increase in vacancy. They went from just over 15 percent vacancy to 19.9 percent.
Turner Drake has observed, as many people predicted, that we are now living in a hybrid office model where people split their time between home and their workspace.
“Economic uncertainty and a potentially deep recession loom before us, coupled with doubt surrounding space utilization as companies shift back to offices after working from home during the pandemic – or don’t. A hybrid model is emerging as the apparent winner at least in the near term, with office workers having flexibility to work from home or in the office,” the report reads.
In terms of warehouses, demand for this type of space has grown throughout Atlantic Canada, with no vacancy rate hitting double digits.
Demand for warehouses grew by 3.6 percent in Halifax, where vacancy rates are now under four percent. Moncton saw a whopping 14.1 percent increase in warehouse demand, where their vacancy rate dropped from double digits to just under six percent. Saint John also saw massive improvements in demand, seeing their vacancy rate plummet from 15.3 percent to 8 percent.
Fredericton was the only city where demand for warehouses dropped, seeing a decrease of 1.8 percent.
“On the industrial side, stay-at-home orders increased demand for online shopping, and hence warehousing space,” notes Turner Drake. “Interest rates are up, out-of-the-house (and out of town) activities are back on the agenda, which should lead to a slowdown in consumer purchases as people tighten up on spending, so warehouse shortages may ease in the year ahead.”
In total, Turner Drake reviewed the usage of 41 million square feet of office and warehouse space for their study.
The University of Toronto recently used a unique method to survey how major cities’ downtowns were recovering. Cell phone usage in 62 cities were used to determine human activity now compared to 2019. It was determined the average North American city has seen 56 percent of activity return to downtown cores compared to pre-pandemic times.
Halifax, however, was the only Canadian city to trend above that average mark with a 72 percent recovery, ranking 20th on the list.
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].