By Anne McCulloch
A lack of available office space in Ottawa is fuelling a building boom in Centretown is likely to attract and accommodate the growing high-tech industry.
City council recently approved plans by Sakto Development Corporation for the building of a second office tower, with residential and retail space, off Preston Street at the Queensway.
Construction will begin this spring if the space is at least 40 per cent leased, says director of marketing, Brian Murray.
“We’re trying to attract the best tenants that we possibly can and really revitalize Preston Street,” he says. “There seems to be a renewed interest in the area and we’re hoping to add to that.”
He says high-tech companies may want to lease the space because it’s located on the periphery of the core with easy access to downtown and Kanata.
“The high-tech area is geared toward the west end, but I think, slowly but surely, maybe the more aggressive, younger companies will want to be downtown in the core,” says Murray.
Buystream, a software and e-business consulting company, moved into 340 MacLaren St. in December when its two separate downtown offices were became too cramped.
The company wanted to maintain a presence in Centretown because many of its suppliers and its employees’ homes, are located downtown, but parking and commuting are drawbacks, says vice-president of marketing Corien Kershey.
“There’s an ambiance here that you just don’t get in the golden mile out in Kanata,” she says.
It took three months to find the new office on MacLaren Street, which is a Victorian house joined to a modern office tower, she says.
“Space is tight in Centretown. We were lucky to find this place,” says Kershey.
Bringing high-tech companies into the area helps the Centretown economy by increased spending in restaurants and shops, raising the area’s tax base and giving the area more political clout with local government, says Kershey.
“High-tech people tend to be paid reasonably well and if they choose to settle in Centretown, that’s always good for the economy and for the neighbourhood,” she says.
Less than two per cent of office space in Ottawa is vacant, down from almost seven per cent a year ago, reported the Building Owners and Managers Association in its year-end office market survey.
It reported that 2.5 million square feet of office space is under construction, almost 90 per cent of which has already been leased and more than half of which is in Kanata, where there is no vacant office space. In Centretown, the vacancy rate is 1.3 per cent for “class A” space — new and well-designed offices that are desired by high-tech companies.
Paul Mullin, senior market analyst with J. J. Barnicke Ltd., a commercial realtor that conducted the survey, says several developers are planning to build office towers downtown to help meet demand.
“There’s quite a bit of land that’s slated for redevelopment in parking lots and a bit in the periphery as well,” says Mullin. “There’s development everywhere.”
Oxford Properties, the owner of Constitution Square on Albert Street, is proposing a third tower and Standard Life may also build a third tower at Slater and Bank streets, he says.
Four downtown buildings — 100 Metcalfe St., 219 and 251 Laurier Ave. and 230 Queen St. — are being renovated, Mullin adds.
O&Y Enterprise’s site plan for twin office towers on Kent, between Queen and Albert was approved by the old Ottawa city council, says director of leasing Steve Nicoletti.
World Exchange Plaza on Queen Street is expanding with the construction of a 16-storey office tower, which is scheduled for completion this fall.
“High-tech has always liked Kanata, but when Kanata got down to no space, they started to look elsewhere,” he says.
The Byward Market was a popular location for high-tech startups before space ran out there too, he says.
Paul Hindo, vice-president and general manager of Royal LePage Commercial, says most high tech companies prefer Kanata, but some software companies are renting offices downtown.
“The tenants have a lot less choice, but not only that, they have to act a lot faster. So if there’s a space right now that’s available, you have to make a decision fairly quickly,” says Hindo.