There’s a global trend towards flexible working and co-working space but this has not been strong so far in Atlantic Canada.
However, there is an opportunity for the commercial real estate market in Halifax if it embraces this new way of working according to a report from CBRE.
“A realistic assessment of office tenant needs should include flexible workplace options, and local landlords will be forced to think outside the box in 2020,” CBRE Atlantic Region Vice President Andrew Bergen told today’s Halifax Market Outlook Breakfast. “Co-working is coming and it’s only a matter of when.”
The technology industry is igniting in Halifax thanks to incubators but while startups are expanding to need permanent office space, they do not have the capital needed for a long-term solution, or their culture does not fit with traditional space.
And the nature of these businesses makes forecasting how they will expand tricky.
“Locking into a long-term lease with significant upfront construction costs is not a favourable option for many companies today,” Bergen said. “The business case for a large co-working provider establishing a presence in Halifax should be taken seriously.”
Bergen says that landlords must rise to the challenge of providing space that is not only affordable and flexible in lease terms, but also meets the modern business culture.
“A workplace that promotes company culture and lifestyle as a differentiator is a priority,” said Bergen. “A strategic real estate model tailored to embrace flexibility and attract and retain top talent will reduce turnover and overall costs, while accommodating future growth strategies.”
The year ahead
As 2020 approaches, CBRE sees several key trends emerging.
With Halifax’s GDP forecast to hit $22.5 billion by 2021, with 2.9% annual growth, jobs growth will mean greater housing demand. Overall apartment vacancy, currently at 1.6%, is expected to remain low as the downtown residential rental market continues to thrive.
Additional investment activity and capital re-allocation will create significant movement within the multifamily segment with some large institutional owners divesting and exiting the market amid historic highs in rental rates and attractive returns.
With a population of 431,000, Halifax grew by 1.6% in 2018 and will continue to expand at a faster pace than the Canadian average. Since 2016 over 50% of Halifax’s net population growth was young people aged between 25 to 39. Therefore, retaining talent will be a challenge for businesses.
Over 60% of Halifax’s population growth is the direct result of immigration.
“Attracting foreign residents is critical to the future state of this region,” Bergen said. “And providing businesses with the best talent will be vital to our city’s short- and long-term economic health.”
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