By Andy Nielsen
The first office tower to be built downtown in a decade is almost completed, but it may be several more years before there is enough new class A office space downtown to meet demand, says one expert.
Barry Nabatian, general manager of Market Research Corp., a real estate consulting firm, says that the new tower of the World Exchange Plaza will help ease the pressure.
But, he says, it will be at least a year before the downtown area should expect to see construction begin on any of the several new downtown office towers currently in the planning stages.
Nabatian says that the deficiency of class A space – new, well- maintained office space that attracts banks, insurance companies, and other “office-oriented” businesses – is causing problems downtown.
“What’s happening is that rents are going up, and people are occupying less space than they normally would,” Nabatian says.
The new 250,000-square-foot tower at the World Exchange Plaza, on Queen Street, is in the final stages of construction and some tenants should be ready for business by January. TD Canada Trust sold the building to British Columbia Investment Management Corp. in August, reportedly for more than $100 million.
Confirmed tenants of the new building include accounting firms Ernst & Young and Deloitte & Touche.
Earlier this month O&Y Properties Corp., the former manager of the World Exchange Plaza, announced plans to expand its Place de Ville office complex on Kent Street to include a 200,000- square-foot, 17-storey tower.
Construction will start when the company has pre-leased 75,000 square feet of space. There are also tentative plans for another tower on the same site.
Another building is planned for a site between Queen and Sparks streets. This would be an 11-storey tower developed by Canril Corp. and Morguard Investments Ltd.
Nabatian says that downtown real estate, especially class A space, is in high demand despite the slowdown in Ottawa’s high-tech sector.
Nabatian says the slowdown resulted in two million square feet of office space coming back on the market last year in the Ottawa region, but that this was mostly suburban space and so did not have a serious effect on the downtown market.
“The downtown market is still very tight,” he says. “(The slowdown) is just a minor adjustment.”
Lori Peters, spokesperson for the National Capital Commission, says the planned new developments fit in with the NCC’s vision for a revitalized downtown.
“We feel strongly that the downtown core should remain the commercial and cultural centre of the city,” says Peters.
Somerset Coun. Elisabeth Arnold agrees.
“Development of these towers, particularly those with mixed development retail and office space, is really beneficial to the health of the core. They are important from an economic perspective.”
Arnold says that care is taken in planning to prevent office towers from obscuring views of the Parliament Buildings.