Looking for Tenders

Article

Value of construction dips but still above-average year

0 15 Home

The total value of private and public sector construction investment in Kitchener’s downtown decreased in 2003, but it was still an above-average year, according to a report that summarizes activity in the city’s core.

2003 report summarizes activity in city’s core

BY GRANT CAMERON

STAFF WRITER

The total value of private and public sector construction investment in Kitchener’s downtown decreased in 2003, but it was still an above-average year, according to a report that summarizes activity in the city’s core.

Figures in the report show that the total value of construction in areas known as the “downtown” and “surrounding neighbourhoods” was $20.4 million last year.

That’s a decrease of 42 per cent from the 2002 figure of $35.1 million.

A further breakdown shows that construction investment in the “downtown” declined to $15 million in 2003, from $25.8 million in 2002—a 41.9-per-cent decrease.

Meantime, construction values in the “surrounding neighbourhoods” dropped to $5.4 million in 2003, from $9.3 million in 2002—a 42-per-cent decrease.

“By way of explanation of the decrease in the values of construction in 2003, it must be noted that 2002 was the highest value on record for the downtown and surrounding neighbourhoods,” the report says.

“Since 1996, average total construction values have been approximately $17 million, so 2003 was in fact an above average year when measured over the past eight recorded years.”

The report says 2003 was also a somewhat volatile economic year which had a direct impact on business and consumer confidence, and hence on the building industry and the number of buildings being constructed or renovated.

“This impact was also felt in downtown Kitchener,” the report says.

Meanwhile, in 2003 the private sector building industry was also in a “wait and see” mood, the report says, and in the case of downtown Kitchener, were more eager to see the progress of earlier-built projects before stepping up to the plate to undertake more projects.

The report notes that the city itself was the leader in terms of construction value during 2003, pumping $10.9 million into projects.

“It is anticipated that these public sector catalyst projects will spurn the private sector to undertake more private sector projects in 2004 and beyond,” the report says.

On the office front, the research indicated that by the end of 2003 the downtown office vacancy rate was 10.87 per cent.

The figure was good news given that unconfirmed reports last year pegged it at between 15 and 20 per cent, the report says.

Overall, the downtown office market is still considered relatively healthy, the report says, although 2003 was a relatively inactive year for new office openings.

“This can be partly attributed to the lack of available on-site parking for office staff coupled with a strong suburban office market, with plentiful free parking for employees,” the report says.

“2003 also witnessed continuing consolidation and mergers of several Canadian companies as well as overall economic uncertainty, which for most downtowns represented little change, or contraction, in demand for new office space.”

On the residential front, the number of new housing units in the downtown and surrounding neighbourhoods increased by approximately 250 units in 2003.

The report notes there were no new major private-sector-only projects built in 2003 but that may be attributed to the “wait and see” approach by developers and builders throughout the year.

While construction values were down in the core, the report notes there were a number of significant downtown projects planned, started or completed in 2003, including:

• The Waterloo Regional Children’s Museum;

• A new Kitchener Market;

• Redevelopment of the Centre Block;

• Reconstruction of Victoria Street;

• Wilfred Laurier University school of social work; and

• Redevelopment of the Arrow Shirt and Kaufman factories.

The report outlines and analyzes the annual progress and performance of downtown Kitchener.

Similar to the experience of many other downtowns’ across Canada and North America, Kitchener’s core has undergone a change over the past three or four decades that has contributed to the decline of its position as a commercial, residential, and social hub.

As a result, the city has acknowledged the need to aggressively reposition the downtown as a competitive investment environment in its long-term economic development objectives.

by Daily Commercial News last update:Jul 21, 2008

Leave a comment

Or register to be able to comment.