The rush by developers to build up land inventories is causing a spike in the value of Ottawa parking lots, according to one local real estate expert.
Brookfield's development site at the corner of Queen and Kent streets could eventually feature half a million square feet of office space. (Google Street View image)
Commercial property assessments mailed out earlier this month show parking lots in Ottawa have increased in value by nearly 60 per cent between 2007 and 2011, according to figures provided by Regional Group vice-president John Clark.
By contrast, the value of the average residential property in Ottawa increased by 26 per cent during that same period.
Mr. Clark says development pressures are pushing up the value of parking lots that will eventually be turned into residential towers.
“You’ve seen a number of condominium developers buying up parking lots as land banking,” he said.
While not restricting itself to parking lots, Claridge has been particularly active in snapping up development land in recent years. The condo builder was believed to set a record for land prices in Ottawa when it purchased the 0.36-acre lot at the corner of Preston Street and Carling Avenue for $9.02 million in March.
Higher assessments don’t automatically translates into higher tax bills. Those landowners whose property has increased in value by less than the average amount could even find their taxes going down.
Overall, Mr. Clark says the increase in commercial assessments is to be expected, given the robust nature of the local real estate market in recent years.
Negligible returns from other vehicles has driven many investors to real estate, and the stability of the Ottawa economy makes it a desirable market.
Average Ottawa property assessment increases:
- New multi-residential construction: 78.85%
- Parking lots: 59.56%
- New office building construction: 57.47%
- Multi-residential: 52.4%
- New industrial construction: 34.13%
- Industrial: 30.64%
- Residential: 26.33%
- Commercial: 22.94%
- Shopping centres: 16.59%
- Large industrial: 14.44%
- New large industrial construction: 12.29%
- New commercial construction: 11.74%
- Office buildings: 10.56%
- New shopping centre construction: 10.32%
Source: The Regional Group