In mid-March, Finance Minister Donna Harpauer announced Saskatchewan balanced budget. The province reported a budget surplus of $34.4 million, leaving many feeling optimistic and positive. The potential for long-term stability in the province is high and the surplus is expected to have positive influences on retail, office, and infrastructure project development.
With development comes a shift in the population, and as more and more people transition to urban settings from rural, there will be more densification of existing Saskatoon and Regina neighborhoods. This is all good news for retail owners.
Budget Surplus Snapshot
At first glance, the budget has been well thought out and it is easy to follow the money. There was nothing flashy noted. The budget is allocated to many sectors that the province felt needed improvement. From schools and hospital to infrastructure and social services it has been included in the budget.
As way of example, the budget included the Saskatchewan plans to spend roughly $2.7 billion towards new schools in Saskatoon, Regina and Moose Jaw, plus new hospitals in Prince Albert and Weyburn. They also allocated about $709 million in 2019 on highways and roads. This is great news for builders and local tradespeople as they will be in high demand once again.
Infrastructure improvement brings positivity to the residence of the province, and it’s very beneficial to the new and expanding businesses in the province. All in all, the provincial government spending plans translate to a healthier commercial real estate market.
Retail Snapshot in Saskatoon
Saskatoon retail has performed well over the past five years, while both office and industrial markets have had somewhat volatile vacancy rates. The 1Q19 market report shows Saskatoon’s retail vacancy at just 3.3%. This rate has steadily declined since the high of 4.0% back in 2017.
The average retail vacancy rate in 2011 was under 1.5 per cent, and although the Saskatoon retail market has not made it to those levels yet, the retail market vacancy is moving in the right direction. Just look at Confederation Park, a subdivision of Saskatoon, as they are reporting the lowest vacancy in the province, at just 0.8 per cent.
After the budget surplus announcement by the Finance Minister, a Saskatoon-based sale associate at ICR Commercial Real Estate wrote, “In a business-friendly climate like this, investment has the opportunity to flourish.” The technology disruption that is currently taking place in retail is not enough to alter the future forecast. Retail is still performing well and considering the province of Saskatchewan has already weathered challenging economic times over the past decade, the provincial government budget is a good plan that will attract more investment into the area.
The 2019-2020 Saskatchewan budget surplus allows developers and investors to create long-term plans for long-term stability. All things considered, despite having to weather some challenging economic times over the past decade in this province, the retail market sector has still performed well. The provincial government-spending plan will aid new growth opportunities in the area.
Now is the time to contact ReDev to explore the current retail opportunities available in Saskatchewan and in neighboring provinces.