Centretown might have some competition in securing new leases to house Canada’s public service, as the government seeks lower rents and greener buildings.
Public Works and Government Services Canada issued a request for information in December about available office space in the National Capital Region to meet its need for more than three million square feet by 2011.
Public Works spokesperson Lucie Brosseau says Public Works is looking for new office space to replace out-of-date buildings.
The information request does not mean that Public Works is accepting tenders for contracts. Brosseau says Public Works has not yet determined which departments will be moved.
“Once specific departments have been targeted the geographic boundaries will be narrowed to meet these departments’ space requirements,” says Brosseau.
What concerns Centretown business and property owners is that the request includes Kanata, Nepean and Aylmer. Traditionally, the federal government has been hesitant to locate its offices outside the downtown core. But given the high demand for pricey downtown office space, the federal government seems to be seeking alternatives.
Centretown has an office vacancy rate of only three per cent, while Kanata, following the high-tech crash, has a vacancy rate of 18 per cent. Darren Fleming, senior advisor and broker for real estate giant GVA Devencore, says office space in Centretown is twice the price of office space in Kanata and other outlying areas. Fleming adds that the federal government is looking at their employment base and considering spreading out employment accordingly.
The federal government’s lease at L’Esplanade on Laurier Ave. will expire in June 2010. Given the 12-year legal battle between the federal government and the property manager Rosdev group, Fleming says “there is a strong chance that the government may leave the aging building.” Public Works neither confirmed nor denied whether or not they plan to renew the lease.
But because the building provides almost one million square feet of office space he says that it would be difficult for the government to relocate downtown.
While Fleming says the trend will be to move offices out of downtown some departments such as Finance will remain in Centretown. In the request for information, the federal government explicitly requested a proposal for a government building in Centretown between 269,000 and 377,000 square feet.
The federal government has several options to meet their Centretown requirements. Export Development Canada will be moving one block north from its current building at 151 O’Connor by next year. The move will free up space in the 400,000 square feet building which could become an ideal site for Centretown offices.
Scott Barrett of Minto Properties says the company proposed their 180 Kent St. development for the new site. Barrett says that seven of the 21 floors have already been leased to the federal government, but they have submitted a proposal for the remaining 14 floors to be used by Public Works.