Quebec City is the capital of the province of Quebec. Founded in 1608 by Samuel de Champlain, it is one of the oldest cities in North America. The city’s most famous landmark is the Chateau Frontenac, which dominates the city’s skyline. Quebec City is located in the St-Lawrence River Valley and the Laurentian Mountains lie to its north.
Throughout its existence, Quebec City has always served as a capital city. It was the capital of New France until 1763, the capital of Lower Canada from 1791 to 1841, the capital of the Province of Canada afterwards, and has been the capital of the province of Quebec since 1867. Consequently, most jobs in the city are concentrated in the public service sector – namely public administration, defence, transportation and tourism.
Approximately 10% of jobs are in manufacturing, including pulp and paper, processed food, chemicals, metal and wood products and electronics. Other prominent industries include insurance, marketing and advertising, computer games and technology. Quebec City is also home to many international company headquarters including Industrial Alliance, SSQ Insurance, La Capitale, Cossette and Desjardins.
Quebec City and its surrounding regions are mostly francophone. A vast majority of the residents are native French speakers, while Anglophones represent fewer than 2% of the population. Quebec City has a total population of approximately 800,000.
As a result of its high density of governmental and insurance jobs, Quebec City’s commercial real estate market has proven to be exceptionally safe and stable. Though most properties have offered nominal growth in value, they have not suffered any declines during years of economic turmoil.
As a result of growing GDP over the past decade, Quebec City is no longer considered a sleepy government town. The beneficiaries have been the insurance, service, finance, construction and tourism industries. Accordingly, the downtown office inventory has remained stable due to limited expansion sites; however, the outer suburbs of Ste-Foy and Lebourgneuf have seen inventories more than double. Surprisingly, Quebec City continues to maintain one of the lowest vacancy rates in North America along with one of the highest affordability ratings.
Due to the city’s high employment and income levels, the retail sector has expanded steadily over the past five to 10 years. In addition to encouraging large national chains to establish more locations, Quebec City has begun to attract American retailers. A lack of good-quality space, particularly in the Ste-Foy district, has kept vacancy levels low and enabled rental rates to improve steadily.
Quebec City’s industrial real estate sector is small in comparison to similar cities of its size and serves primarily local businesses. Concentration of ownership with local families has kept inventory levels stable with very little speculative building.
Institutional investors, including pension funds, REITs and public companies, are attracted to Quebec City in increasingly large numbers because of its historically-low vacancy rates and stable returns. While institutional investors dominate the office sector, they have also invested billions in the retail, and multi-residential markets. Private local investors remain strong in all sectors with particular footholds in the industrial and multi-residential sectors.
Avison Young’s roots in Quebec City date to 2004, two years after the opening of the Montreal office. In recent years, Quebec City brokers have negotiated several large transactions in all asset categories while partnering on major projects with other Avison Young offices in Canada and the United States. Avison Young’s Quebec City office is particularly well-suited for multi-lingual transactions, and collaborates frequently with the Montreal and Toronto offices on a variety of office leases, acquisitions and dispositions.