Charlottetown commercial rental rates are the highest in the Canadian Maritimes, according to one of the region’s real estate firms.
Turner Drake & Partners is a real estate consulting firm offering valuation, economic intelligence, property tax counseling and space measurement advice throughout Atlantic Canada.
Prince Edward Island’s provincial capital also has the second-highest vacancy rates in the region, according to the firm.
The firm collected rental, vacancy and operated expense data for 31 office and warehouse properties.
The data was analyzed by a team of trained researchers who found that commercial vacancy rates were up 2.65 percentage points to 14.77 per cent. The only city with a higher vacancy rate than Charlottetown is Saint John, New Brunswick.
Rob Lantz, chair of planning, stated that some of the vacant office space is not currently fit to be leased but may be included in the available supply for purposes of the study.
He said that major upgrades could be required or that a space may not meet a tenant’s requirements, or that both situations may exist at the same time.
Lantz also noted that under the Provincial Real Property Assessment Act, vacant commercial properties are considered non-commercial.
In these circumstances the city can only charge the non-commercial tax rate of $1.67 per $100.00, as opposed to $3.86 per $100.00. If the owner does not have any significant operating expenses, this could be an incentive to keep a building unoccupied.
Tanya O’Brien, the chair of city enhancement for Downtown Charlottetown Inc. pointed out that in a small market like this one, the vacancy rates can swing dramatically very quickly.
She said that two or three buildings were included in last year’s survey that have dropped out of the current one. O’Brien also stated the change in number of buildings had skewed the numbers.
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