Located on the Ottawa River on the border between the provinces of Ontario and Quebec, Ottawa was formerly a logging town before it was named as the new capital of Upper and Lower Canada by Queen Victoria in 1857. The headquarters of the federal government in Canada, Ottawa has traditionally been viewed as a government town. Over the last 25 years, that perception has certainly changed as the technology sector has taken a position of prominence in the employment makeup of the region.
Ottawa’s economic profile is considered one of the most stable and predictable in North America. With the federal government providing core financial stability through its employment base, the technology and tourism sectors have taken a leading role in the steady gains in job opportunities during the last two and a half decades. Unlike other economic growth centres across the country, Ottawa’s economy is one of slow but predictable growth.
The National Capital Region, which includes both sides of the Ottawa River, including the City of Gatineau in Quebec, has a population of approximately 1.25 million inhabitants, making it the fourth-largest metropolitan centre in the country. Ottawa proper has a population of 925,000 people.
Due to the strong presence of the federal government and its dominance as the largest tenant in privately-held office buildings in the region, Ottawa’s 46 million square feet of office space boasts one of the lowest vacancy rates in the country. Outside of government, office tenancies tend to be smaller than most other economic centres, with tenancies averaging 5,500 square feet across the region. Larger tenancies tend to be based in the core, while the technology sector is the dominant large-space user in the West End submarket of Kanata.
With a well-educated, bilingual workforce, very low unemployment relative to the rest of the country, and what is considered by many as the most affordable large city in which to live, Ottawa’s retail sector has witnessed steady growth in recent years. American retailers have discovered this region, as many of the urban developments that have sprung up during the recent housing boom are now being serviced by retail centres with an increasing variety of new shopping concepts. Still under-serviced on a per-capita basis, retail developers continue to see excellent returns on their development projects in the region.
Ottawa’s industrial market can be characterized as small but well suited for its purposes. Located 60 kilometres from the Highway 401 transportation corridor, Ottawa is very much at the end of a spoke on many of the hub-and-spoke distribution centres that dot the route. With the west island of Montreal a short 200 kilometres away and the U.S. border 60 kilometres from the city limits, major distribution facilities are absent from the product mix in the region. Most new industrial product can be broken down into 5,000-square-foot bays and, in keeping with the service nature of industrial tenancies that dominate the tenant rolls in the region, many properties feature an office component.
Ottawa’s stable workforce and low vacancy rates in both the office and multi-residential investment grade assets have created a very desirable investment climate for both offshore and domestic investors. Multi-residential properties never make it to the open market as multiple bidders present offers in what turn into private auctions for well-connected dominant players. Trophy office assets and the occasional good-quality industrial property that make it to market also face multiple bids. Steady and consistent, albeit not spectacular rates of return, are hallmarks of the Ottawa investment market. Consequently, Ottawa provides something that many investors are looking for – a safe place in which to invest capital.
One of the firm’s newer offices, Avison Young’s Ottawa office opened in April 2008. As part of a lean, streamlined team of professional staff and support workers, brokers focus on tenant-representation and small investment-sale mandates. This National Capital Region office continually works on assignments for some of Canada’s leading professional-services firms, and oversees leasing mandates across the country.