Demographic: Population 155,838
Avg. Household Income $ 69,780
Market Overall Health: "Steady during 2010."
"Expect the same in 2011."
Economic Drivers: Lifestyle in-migration, Tourism, Education and Healthcare.
Office Market: The office vacancy rate stabilized in 2010 at 8% despite the fact that the provincial government downsized and returned space to the market. Three new office strata developments were completed in 2010 and no new projects were planned for 2011. Rental rates remained steady in 2010 and will likely decline in older office stock in 2011, a boon for tenants.
Industrial Market: Industrial vacancy increased to 6% in 2010 and is expected to increase as negative absorption carries on due to the slowing of the regional economy. Rents softened slightly and will trend downward in older industrial product whereas rents in new product with good amenities are expected to hold firm in 2011. No new buildings were completed in 2010 and none are expected in 2011, however a few local developers are preparing projects for 2012 completion.
Investment Market: Strong demand and limited supply of product. Regional, private investors with long term investment horizons are keen on Central Vancouver Island apartment buildings and retail strip plazas. Attractive long term interest rates will keep yields at current levels. Wellington Court Retail Centre sold in 2010 for $11.2 million at a 7.4% cap rate.
Retail Market: Retail vacancy increased in 2010 as consumer spending decreased. As the population continues to grow, retailers opening in Nanaimo are showing a preference for locating in the south. Country Grocer, Rona and Rexall all built new stores in the Southgate node. 2010 rental rates were under pressure and are expected to drop again in 2011, favouring tenants. Phase 1 of the Port Place Shopping Centre in downtown Nanaimo is expected to be completed in 2011; subsequent phases will add retail and residential to the area.