Saskatoon, with a population estimated by the City to be 207,700, is centrally located in the developed southern half of the province of Saskatchewan and is the largest city in the province. According to SREDA, the Census Metro Area population is around 237,000. Saskatoon serves as the distribution centre for the northern half of the province.

Saskatoon has been able to attract significant economic diversification to temper the effects of difficulties in the agricultural sector.

A good portion of the economic development has been science related and an inter-related medical cluster is forming around the university. Canada's only synchrotron, the Canadian Light Source (CLS) became operational in July 2004. In March 2004 it was announced that a second bank of beamlines will be added as Phase 2 and construction is underway of this expansion. In Nov. 2006 a third phase was announced that will bring the number of beamlines to 19.

Saskatoon, through the University of Saskatchewan and Innovation Place, has also become a leader in agricultural biotechnology, which ties in to the provincial agriculture base. Saskatoon has over 35 ag-biotech businesses that include biomedical (nutraceuticals and supplements), bioenergy (ethanol and biodeisel) and bioindustrial (fibre utilization).

The Standard & Poors municipal bond rating service acknowledges the City of Saskatoon's strong financial position by giving City debentures the AAA (highest possible) rating since 1989. Saskatoon continues as one of the soundest cities covered by them. Debt levels are consistently low, while reserve levels are high. In fact, the City's reserve levels usually exceed the gross debt outstanding.

The overall real estate market outlook has become exceptionally buoyant. An indicator of the real estate market activity is the Multiple Listing Service with a record high $693-million in transactions reported in 2006. In 2007, the first eight months have seen a 107% increase above last year's record high with $1.0-billion in sales reported to date.

Strong manufacturing, construction, and mining sectors of the economy plus an influx of speculative out of province buyers have spurred large increases particularly in residential, industrial and multi-family real estate markets.

The resale housing market continues to see strong increases in average sale price, according to MLS statistics. The average residential sale price for the year 2005 was $144,786 and the year 2006 was $160,577 on the sale of 3,430 houses. The year to date (August) has climbed to $226,783, up 43% over last year and there are over 4,210 sales so far this year. This past month the average sale price increased slightly to $253,000.

The year to date figure is the average sale price of all of the houses sold through MLS in the city. There were a further 780 houses sold in the rural areas over 2006 with an average of $146,573 and 792 sold year to date with an average of $176,900.

Readers of this overview are welcome to use the information as deemed appropriate, providing Brunsdon Junor Johnson Appraisals is quoted as the reference source. The information contained herein is believed but not warranted to be accurate. Readers are cautioned to make their own investigation before making any financial decisions.

1.  TOURISM     -    Tourism is significant to the local economy with several events in 2007 involving over 3,000 visitors.

August 2007 saw the opening of the 84,000 sq.ft. Dakota Dunes Casino about 27 km south of Saskatoon and that is expected to draw some 2 million visitors a year. It has free shuttle services from various malls in the city.

Saskatoon hosts a number of annual festivals and events. The downtown area, in particular, the river bank parks feature multi-day events such as the Taste of Saskatchewan, the SaskTel Jazz Festival which brings in hundreds of international artists for 10 days, and the International Children's Festival attracts children from throughout the province. The Shakespeare on the Saskatchewan Festival presents live theatre nightly in July and August. The Cruise Weekend is a three day downtown event that attracts around 50,000 people.

The Canada Remembers Airshow at the airport is a two day event attracting 34,000. The Fringe Festival featuring international alternative theatre is hosted in the Broadway area and Folkfest, a three day multi-cultural festival which has been rated as one of the top 100 events in North America, has venues that are located throughout the city. The Wanuskewin Heritage Park, located along the river just north of the city, and the Western Development Museum at the southern edge of the city have also added significantly to the tourism sector of Saskatoon.

2.  AGRICULTURE     -    The local agricultural economy is directly affected by activity in world commodity markets. According to reports, Saskatchewan once produced half of the entire quantity of Canada's major export cereal crops: wheat, oats, barley, rye, flaxseed and canola. In response to changing world markets, Saskatchewan farmers have shifted dramatically from growing mostly cereals to growing specialty crops and raising animals. Saskatchewan now produces more than 90 per cent of Canada's lentils and chickpeas, and 70 per cent of its peas and is now the world's leading producer of lentils, mustard and canary seed. Canola production is also increasing quickly.

Along with this has been growth in the number of businesses handling, cleaning and processing these crops, which are largely destined for export markets. Test cropping has also been reported successful on a number of spices and herbs, as well as large-scale green house operations.

Saskatoon is central to the farm sector market. According to provincial crop reports, this year's crop outlook is generally forecast to be close to the 10 year average. The harvest in 2006 had production that was slightly below average but the quality was above average. The provincial crop report indicates that as of September 3rd, 44% of harvesting was completed.

CNH (Case New Holland), the world's largest manufacturer of tractors and combines consolidated their air-seeder manufacturing operations to Saskatoon. The plant has since become CNH's centre of all tillage and planter production for both New Holland and Case IH brands and they phased in production of combine headers as well. In October 2006 they announced that another line of tillage products would be added and they are expanding their building by some 40,000 sq.ft.

The loss of the railroad grain transportation subsidy (Crow Rate) in 1995 has encouraged more diversified value added food production, shipping a finished processed product instead of the raw materials and the manufacturing jobs that go with them.

The original Mitchell's Gourmet Foods / Maple Leaf Foods processing plant on 11th Street was phased out and closed. A planned new facility on the north side of the city has now been downsized to a distribution centre to be built. Mitchell's Gourmet Foods / Maple Leaf Foods is one of Canada's largest value-added processor of pork products and expanded their production and processing facility in 2001, bringing their employment numbers to over 1,400. This newer facility is to remain in operation.

There is expected to be significant expenditure in rural large-scale hog operations as the technologies improve to alleviate air, ground and water contamination from animal waste. Reportedly, final testing is now underway to convert the raw manure to biogas that is used to produce heat and electricity plus organic fertilizer concentrates.

In 2002, Centennial Food Corp. opened a $34 million food processing plant designed to package frozen meat, vegetables, and seafood. Adjacent to this plant in 2003, Westco Storage Ltd. of Winnipeg built a $5-million, multi-temperature distribution facility on 60th Street. The 87,000 square foot building is hoped to form the nucleus of a new food processing park in Saskatoon and this building could be expanded to 240,000 sq.ft. as needed.

A $15-million chicken processing plant was built by Prairie Pride Natural Foods Ltd. with the first 115,000 sq.ft. phase beginning production in January 2006. This is immediately north of Centennial Foods.

In August 2007 the Cargill canola crushing plant in Clavet located 16 km southeast of Saskatoon, announced that rather than do a planned expansion to their crushing plant, they are building an entire new crushing plant next to it, doubling their production. - Click here for further details

3.  RESOURCE DEVELOPMENT     -    Mining has a major influence on the provincial and local economy. The Saskatoon region is the world's largest exporter of uranium, and nearly two-thirds of the world's recoverable potash reserves are located in the Saskatoon region. According to the Sask. Bureau of Stats, provincial mineral production included crude oil, natural gas, potash, uranium, gold, coal and salt.

Saskatoon is the head office for the Potash Corporation, the world's largest integrated fertilizer producer of the three primary nutrients and they have production facilities in five countries. There are 6 potash mines in proximity to Saskatoon.

In April 2005 a new provincial tax incentive was announced that led to immediate large expansion by all three of the potash mining corporations in the province. - Click here for further details

In June 2006 it was announced that Anglo Minerals Ltd. from Calgary has entered into a joint venture agreement with BHP Billiton Diamonds Inc., and a 66 month feasibility study would be started to investigate opening a new potash mine in the vicinity of the Lanigan mine. - Click here for further details

Saskatoon is also the head office of Cameco Corporation, the world's largest uranium mining company that produces one-third of world production. They have the two largest and highest grade uranium deposits in the world and in December 2004 started construction of a $450-million mine at Cigar Lake. This mine has been experiencing some flooding problems which they say will delay the production start until 2010. French government owned Areva Resources Canada Inc. is based in Saskatoon and is a partner in these two mines.

Gold and diamond activity in northern Saskatchewan is also adding to Saskatoon's stature as a mining supply centre. Claude Resources, with its head office in Saskatoon, is the largest gold producer in the province. In 2003 they spent $2-million to extend the vertical mine shaft at Seabee to prolong the lifespan of the mine and in December 2004 they announced spending $2-million to double their mill production to be able to take advantage of two nearby deposits at Porky Lake and Santoy Lake in the future.

In the diamond sector, the Fort a la Corne field, 65 km east of Prince Albert is one of the worlds largest known diamond bearing kimberlite deposits with over 70 pipes now identified and the kimberlite field is estimated to contain over 9 billion tonnes.

The Saskatoon based Shore Gold bought out the interests of De Beers as well as the minority interest held by Cameco Corp. Shore then resold 40 per cent of the joint venture to Newmont Gold of Denver, which has held nine per cent of Shore's shares for several years. - Click here for further details

In November 2006 they announced that the budget for exploration in 2007 will be $66.5 million.

In their first 25,000 tonne sample collected in 2004, Shore Gold announced recovery of two 19.7 carat diamonds and five others that are 10 carat or more totalling just over 4,000 carats of which many are commercial sized diamonds. Phase 2 extracted another 18,000 tonnes preparing a prefeasibility study and according to news releases have recovered over 2,000 carats, including one 19 carat and three others larger than 10 carats to the end of January 2006. In Phase 3, they continue to announce recoveries of diamonds ranging from 5 to 15 carats plus the 2 largest diamonds recovered in Saskatchewan at 49.5 and 22.56 carats.

According to the CEO of Shore Gold, it is now in a position now to push the Star Diamond project to pre-feasibility with a mine that could be producing gem quality stones as soon as 2011. Current testing is finding a larger ore body than first thought plus a higher number of carats per tonne. - Click here for further details

Other drilling exploration is being done in the area by Forest Gate Resources, who have reported diamond recovery from their test drilling, and Saskatoon based Great Western Diamonds Corp. is also doing test drilling in the area near Candle Lake. In February 2007 they announced that they have signed an exploration agreement with Montreal Lake Cree Nation on a portion of their traditional lands. Diamondex Resources Ltd. is presently doing test drilling around 30km from Saskatoon.

4.  EDUCATION AND TECHNOLOGY     -    Several large educational institutions are located in Saskatoon, the largest being the University of Saskatchewan and the associated Royal University Hospital. This campus accommodates over 19,000 students and is a major employer in Saskatoon. The SIAST Kelsey Campus, a technical secondary school, accommodates approximately 17,000 students annually.  The Saskatoon Public School Division has 53 schools and a student population of 20,000. In September 2006 they opened a new high school in University Heights in 2007 they opened a new high school in the new Blairmore subdivision. The Saskatoon Catholic Board of Education has 14,000 students in 41 schools and also have opened a new high school in Blairmore in 2007.

Innovation Place, the research park on the University campus, is serving as a strong catalyst to the growth of an increasing high technology sector, not only in ag-biotechnology but also medical research and fibre optics. Innovation Place's role is to supply facilities, on a commercial basis, to support the research and development community in Saskatchewan. According to a 2007 Insightrix study, Innovation Place contributed $195 million to the economy of Saskatoon and $259 million to Saskatchewan's economy in 2006. There are 3,692 staff employed by 130 organizations in 18 buildings. Construction was started in fall of 2005 on a 5 storey, $25-million, 151,000 sq.ft. office building with expected occupancy in fall of 2007. The CLS synchrotron is located on the university campus, adjacent to Innovation Place.

The Saskatoon Regional Economic Development Authority (SREDA) has taken a very active global approach towards encouraging technology and industrial companies to consider Saskatoon as a location. The Greater Saskatoon Chamber Of Commerce also provides support services for local businesses.

5.  CONSTRUCTION

The City building permit total in 2006 increased by 17% over 2005 to $323.4 million. Of this, 26% ($83 million) was for single and 11% ($36 million) was for multiple housing. Commercial was 23% ($73 million) and industrial at 13% ($43 million). The institutional and assembly category was 27% at $87 million and the Other totaled $2 million.

The public development sector highest priority civic project is the redevelopment of the South Downtown and City-owned river front sites and there have been decades of discussions over this project. The City released an overall master plan in April 2004 for this area which encompasses the former A.L. Cole and Gathercole sites and the first phase of servicing was installed. In November 2004 the combined sites were renamed "River Landing".

In March 2007 Remai Ventures Inc cancelled a plan to build a hotel and spa and the land was sold back to the City. A new call for expressions of interest resulted in a August 2007 proposal from Lake Placid Developments for an eight-storey boutique hotel/restaurant, a four-storey office/retail building and a 20-storey condo tower that is receiving positive reaction.

In December 2005 a deal to sell part of the rest of the site to Persephone Theatre was approved and a new $11-million theatre is now under construction.

Some $30-million of public funding is slated to be spent on the western side remediating the site and putting in parks, services, an outdoor village square, and sports fields. The purchase of the non-City owned land that is required has now been done. A Farmers Market building is nearing completion.

The City completed a 47,000 sq.ft. expansion to the downtown Centennial Auditorium in Sept. 2006. Also in the downtown at the same time, construction was completed on a 12-screen Galaxy Cinema.

There have been a large number of construction projects on the University of Sask. campus in addition to the synchrotron. The $27-million Kinesiology building opened in Sept. 2003. Other work recently completed includes the Structural Sciences addition at $26-million, the VIDO addition at $14-million, chemical engineering extension at $10-million plus several other additions. The $10-million 4-level parkade opened at the end of 2004 and a $20-million renovation to the College Building was completed in September 2005. A $110-million International Vaccine Centre (INTERVAC) was given the green light to start in 2007 which will add 160,000 sq.ft. onto the VIDO building and the Vet-Med College has started a $57-million addition to be completed by March 2008. In addition, a $250-million Academic Health Sciences Centre, a new ice arena, and a new student housing complex are in the planning stages and Griffiths Stadium got an $8-million upgrade in 2006.

In 2004 the RCMP moved into a new 48,515 sq.ft. detachment building located on Brand Place at the southern edge of the city. This opened another site on 8th Street for redevelopment and it sold in July 2006. The building is now being stripped to the shell and entirely re-built with Triple A office space to be occupied this fall.

There continues to be strong activity in commercial construction.

A new mall, Stonegate Centre is located on the southern edge of the city at Clarence Avenue and Circle Drive. It is slated to have 430,000 sq.ft. A 156,000 sq.ft. Wal-Mart opened in January 2007 plus a Home Depot is now under construction. Also planned adjacent to this is a large development called Stonebridge Business Park. - Click here for further details

Other commercial malls coming on stream over the next year will be Blairmore on the western edge of the city with 31 acres and 315,000 potential sq.ft. of retail. This site is reported by the StarPhoenix to have been purchased by a Wal-Mart subsidiary. The City still has a fully serviced 23 acre lot in University Heights. The decision has not been made yet when it will be tendered.

Preston Crossing opened the 292,000 sq.ft. Phase 1 in 2002. This includes a 110,000 square foot Canadian Tire anchor store plus 9 other stores ranging from 10,500 square feet upwards. Phase 2, including a 132,000 sq.ft. Wal-Mart opened in 2005 plus an Old Navy and a PetsMart. The whole project has been purchased by Harvard Developments Inc and they have stated they have more tenants wanting into this mall and they would like to get approval from City Council to proceed with Phase 3 as soon as possible. City council denied their request for smaller building sizes than previously approved.

Jubilee Ford and Sherwood Chev relocated in 2001 into several new dealership buildings in the Saskatoon Auto Mall at the southern edge of the city creating some $30-million in new construction.

Varsity Common opened in 2002 on the Jubilee site with a Garden Market IGA, a Montana's restaurant, a Tim Horton's and a 19,000 sq.ft. strip mall. The Sherwood site on 8th Street saw London Drugs open in 2002 and Winners and Staples opened in 2003. An East Side Mario's restaurant opened in 2004 and a new 4 bay, fast food building was added.

A new 40,000 sq.ft. Extra Foods opened in 2005 in Lakewood and a Giant Tiger store was built on 22nd Street West. The Saskatoon Co-op opened a new 45,000 sq.ft. grocery store in the University Heights area in 2002 plus a gas bar and strip mall. Also built in this area were a TD-Canada Trust branch and a Teacher's Credit Union branch.

The City of Saskatoon and The Partnership have developed tax and heritage incentive programs that are designed to increase the amount of downtown housing. Construction was completed in 2007 of a 15 storey 100 unit high rise condo tower on Spadina Crescent that was reportedly pre-sold out. In the fall of 2005 a 14 storey assisted living complex along side the Park Town Hotel was opened. Several projects are now under way to convert large older warehouse structures into office and housing complexes. The Rumely building is now being converted into upscale condos and the King George Hotel is now being stripped and gutted for reconstruction into main floor retail and the balance condos.

Industrial construction has received a boost from spin-off from the multi-billion dollar Athabasca Oil Sands project over the past few years. Most significant new construction activity was in design built, office/warehouse/shop space in the northern end of the city.

In the housing sector, CMHC reports that housing starts for the year to date are 63% higher than last year in the city and over double in the surrounding areas.

The whole CMA, including the surrounding communities is up 110% over last year in starts suggesting strong activity in the outlying communities. Construction is underway on MacCormack Ranch, a 40-acre 143 housing subdivision in Martensville to phase over four years (2005-2008) and include medium-priced housing and some higher end residences that will back onto an artificial lake. Several of these communities are in the process of annexing land for more residential lots as they have sold out all existing serviced lots.

About 45% of the starts (403) in so far in 2007 in Saskatoon were apartment or townhouse condominiums, now priced in the $200,000 to $250,000 range. Most single-family house resale prices have now climbed to the $200/sq.ft. to $300/sq.ft. range including land and building.

There had been virtually no rental apartment housing construction activity other than seniors complexes. The first two rental apartment blocks to be built in over a decade, each with 63 suites were built in 2002 and a 130 suite apartment block was built in 2003. These have now been sold and will likely be marketed as condos.

6.  COMMERCIAL & INVESTMENT

The province wide retail sales figures moderated through 1998 and 1999 and have been rising since. Total retail sales for 2006, according to Sask Bureau of Statistics are up 6% to $11.7 billion.

In 2006 we documented sales of $82.5-million of retail and office space with a total of 771,000 sq.ft. These are arms-length sales that we are aware of, and may not include all of the sales in the city.

The capitalization rates generally were in the 8% to 11% range.

The downtown building market comprised 58% of the city-wide 2006 retail and office market sales (by building area) and had an average sale price of $76 per sq. ft. of building, including land.

The apartment block market has seen a very strong level of sales activity with sharply increasing sale prices per suite and a decline in overall capitalization rates in all areas of the city. There is now a strong demand for any quality of buildings and there is a high percentage of out of province buyers. It has become common for buildings to sell above the listed asking price and in many cases it requires a 50% down payment to purchase.

In 2006 we documented sales of 35 apartment blocks totalling 1,524 suites. Capitalization rates generally ranged in the 7% to 9% bracket. The year to date (end of August) has seen 60 sales with a total of 1,448 suites that have closed and some 25 more that are reported but not yet closed. Capitalization rates are half of what they were last year.

Over the past 12 months, we have documented 94 properties that have sold with a total of 2,939 suites and a total sale price of $146-million. This is about 20% of the total environment

These include arms-length sales that we are aware of. These figures may not include all of the sales in the city.

7.  APARTMENT RENTAL MARKET     -    Information from the Spring 2007 CMHC Rental Market Report, indicates that the city-wide vacancy in Saskatoon suites declined to 3.0% in April 2007. The vacancy in October 2006 was 3.2% and it was 4.6% in 2005 and 6.3% in 2004. They suggest that new rental households were created by in-migration and rental supply was reduced by renovations and condo conversions.

This survey is a snapshot of the number of vacant suites at a specific date and does not represent an annual amount of vacancy.

They found 430 vacant suites out of 14,443 as of April 2007.

The west side apartments continue to show the highest vacancy levels, particularly Zone 6. The city-wide average rent increased by $19/month in the past 6 months to $575 per month.

The current apartment vacancy information is summarized on the following table:

The Saskatoon Apartment Operating Cost Study was created by Brunsdon Junor Johnson Appraisals as a service to our clients and to provide property managers, owners, the mortgage industry and our firm a base for comparison when analyzing apartment operating statements.

One corporation with significant holdings in Saskatoon apartment rentals is Boardwalk Equities and another is Remai Group. Their web sites provide a good source of rental information in Saskatoon.

8.  RETAIL RENTAL MARKET    -    Vacancy information is supplied by ICR Commercial Real Estate Services. They show that the overall city-wide vacancy in the past 6 years has ranged from a high of 4.6% in 2000 to new low of 3.0% in 2006. The report shows the following vacancy levels: 

Source: ICR Commercial Real Estate Services - Saskatoon Retail Forecast 2006/07

ICR Commercial Survey Of Saskatoon Retail Vacancy Levels Rental Rates and Occupancy Costs
Neighbourhood	2006 Vac.	2005 Vac.	2004 Vac.	2003 Vac.	2002 Vac.	2001 Vac.	CRU Rent Rates	Free Stand or End Cap Rates	Occupancy Costs
Idylwyld Drive	2.5%	3.7%	2.6%	1.5%	1.3%	6.7%	$8-$14	$16-$18	$3.50-$5.00
Confederation	8.0%	5.1%	4.4%	5.2%	4.6%	3.8%	$10-$17	$18-$24	$5.00-$6.25
33rd St West	2.7%	3.8%	4.7%	9.8%	5.0%	6.2%	$6-$12	$15-$17	$3.50-$5.00
22nd St West	8.4%	9.2%	8.6%	9.1%	5.7%	4.3%	$6-$12	$16-$25	$5.50-$6.75
20th St West	3.3%	12.9%	12.1%	11.1%	6.7%	9.5%	$5-$7	$7-$10	$2.75-$3.75
Downtown Peripheral	5.8%	4.0%	2.5%	2.4%	2.7%	1.0%	$7-$15		$4.50-$5.50
Downtown Core	0.9%	1.5%	3.5%	3.5%	4.8%	4.6%	$9-$25	$27-$32
Broadway Ave	1.8%	1.4%	3.3%	4.4%	2.3%	0%	$14-$18	$20-$24	$7.00-$8.50
8th St East	2.4%	2.1%	3.2%	5.0%	3.1%	2.2%	$14-$26	$26-$35	$6.50-$8.00
University Heights	1.2%	3.4%	2.4%	1.1%	0.0%	5.5%	$16-$22	$18-$30	$5.50-$7.00
Lawson Heights	1.4%	3.7%	3.6%	1.4%	0.4%	1.3%	$14-$18	$25-$30	$5.75-$6.50
Circle Drive	2.3%	2.3%	2.7%	3.5%	1.8%	4.9%	$10-$16	$16-$32	$5.75-$7.25
Sutherland	10%	3.5%	1.0%	0.0%	1.9%	6.2%	$9-$13	$14-$22	$4.50-$5.50
51st Street	2.3%	5.4%	2.3%				$6.50-$22	$16-$26	$3.50-$5.00
Enclosed Shopping	9.3%	7.5%	5.0%	5.7%	6.5%	6.1%
City Wide Total	3.0%	3.5%	3.8%	4.1%	3.2%	3.1%

Eighth Street East is Saskatoon's major retail commercial strip east of the South Saskatchewan River. It has a broad mixture of restaurant, financial, automotive, office and CRU facilities. The tenants range from local companies to national companies with AAA covenants. Demand for quality commercial space on 8th Street has been high over the past number of years, attracting some of the higher retail rental rates in Saskatoon.

Eighth Street East has over 2.2 million sq.ft. of total inventory, with around 20% of this in free-standing buildings. The most predominant use is the regional shopping centre, The Centre, anchored by Zellers and Safeway. Eighth Street is presently showing very little vacancy.

Broadway Avenue has some 185,500 sq.ft. of primarily retail space and has a vacancy level very near zero at this time.

Downtown retail varies depending on the level of upgrading that has occurred. ICR Commercial Real Estate have indicated that the retail vacancy level in the downtown area is near zero going in to 2007.

The ICR report indicates that the downtown has the lowest downtown vacancy of the western Canadian cities.

The Partnership, a progressive group of downtown business people committed to a strong core area, has been a very positive force in revitalizing the central business district.

The Saskatoon office market is stronger now than it has been in decades. Vacancies are down, rental rates are conservatively increasing, and tenant inducement packages are becoming a thing of the past.

With strong demand and limited supply, property values are increasing and capitalization rates are decreasing; a trend ongoing across the country.

Given the limited amount of new construction being added to this mix, rental rates are forecasted to continue to strengthen through 2007 with vacancies continuing to decrease.

10.  INDUSTRIAL    -    The City of Saskatoon passed a development plan in 1998 to make industrial areas more focussed with respect to the type of enterprises that may locate in each area and enhance the compatibility of future developments. A new industrial park is in the long range plan that will be an Environmental Industrial Park.   It is to be located north of Agriplace on the western side of Highway #11.   The intention is to accommodate higher risk operations within a concentrated area with higher levels of protection to the public and to the environment. Shorter range plans are to continue the development and sale of lots primarily in the Marquis Industrial area.

The City 2006 Industrial Land Inventory indicates the total amount of industrial land in the city is some 4,744 acres, of which 742 acres (16%) are unserviced and largely undeveloped and are primarily in the Marquis area.

Of the 3,198 acres of serviced industrial land, most is at the north end of the city, with 75% of the total serviced land inventory in the North and North West areas. The North Industrial (south of 51st Street), Hudson Bay Industrial (51st Street to 60th Street) and Marquis Industrial (60th to 71st Streets plus the former Silverwood Industrial) have 59% of the city total. Agriplace and the Airport Business Centre in the north west account for 12% of the city total.

Secondary developed industrial locations include: the South West and West Industrial areas in the neighbourhood of 11th Street West; the CN Industrial location off Circle Drive in the south; the Sutherland Industrial Park to the east; and the inner-city Central and Kelsey Industrial areas.

Industrial land prices have climbed significantly in some areas over the past few years. Land on the outskirts of the City without full servicing has also seen strong activity over 2006.

The City of Saskatoon is the now the only developer of industrial land in the city. Prices of City-developed, IL3 zoned land available and now being marketed are in the $150,000 to $170,000 per acre range for fully serviced industrial land in the Marquis area. Lots that were previously purchased in the Hudson Bay area and are now being re-sold are selling in the $180,000 to $215,000 per acre range, up as much as 40% over last year. These are zoned IL1 or IH.

The only other land that was being marketed is in Agriplace and was owned by CIC Industrial Interests Inc. (provincial government). They sold their last lot for $135,000/acre in September 2006. Some of this land is now re-selling in the $150,000 to $200,000/acre range.

In January 2006 the City purchased all of the undeveloped serviced land in the South West Industrial area from the provincial government. This, together with the old Mitchell's site will give them the land that they need to complete the planned bridge south of this. It will provide land that they can exchange for the other businesses that need to be relocated due to the routing of the bridge roadways but removes over 50 acres of serviced land from being marketed.

The sales summary below shows activity levels in the North area which includes only North, Hudson Bay, and Marquis. The Other includes all of the other areas. The bulk sale of the 42 lots (63.2 acres) by the CIC Industrial Interests to the City at $58,500/acre in January 2006 are not included.

The North category includes 2 recent sales of commercial type land with frontage on Miller Avenue.

Rental rates on new construction have climbed to the $7.00 to $9.50/sq.ft. range, with rates more typically in the $5.00 to $7.00/sq.ft. range on existing product.   The bottom end of this range is set by larger warehouse buildings with minimal office content, poorer quality buildings and older buildings, with the top end set by newer design-built warehouses which may include a fenced yard and upgraded office space.   Locations having retail influence will generate rents above this level. 

The city-wide vacancy rate, as suggested by real estate agents specializing in the rental building segment of the marketplace, reduced to just under 2% at the end of 2006. According to the Colliers McClocklin Industrial Market Report the Industrial market is made up of ±17 million sq.ft.

In 2006 we documented some 615,000 sq.ft. of industrial building space that was sold at an average of $55.99 per square foot including land. The average rental rate was $5.70/sq.ft. Cap. rates generally were in the 8% to 11% range.

These are arms-length sales that we are aware of. These figures may not include all of the sales in the city.

Brunsdon Junor Johnson Appraisals is a real estate appraisal firm providing a wide range of appraisal and consulting services, with the primary market being the northern and central portions of the province of Saskatchewan.