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Quebec City office space grows

Quebec City office space grows

Quebec City, known for its cobblestone steps, historic Plains of Abraham and popular Winter Carnival, hasn't traditionally been associated with glittering office towers.

But with more office space now under construction in Quebec City than in Montreal, the provincial capital is making a name with its lower costs among gaming-industry tenants and big insurance companies.

On Wednesday, Colliers International said it's become the first real estate services firm in Canada to open a satellite office in Quebec City, with some competitors saying they've received extensive interest from clients and could follow next year. Colliers is trying to establish a niche in Quebec City representing tenants, an area now missing in the city's burgeoning office market.

"We're really the only national agency in Quebec City right now," said Andrew Maravita, managing director, Montreal for Colliers International (Quebec) Inc.

"There are a lot of companies establishing offices in Quebec. But the market is not that sophisticated. Tenants aren't used to being represented by brokers in their negotiations with landlords."

During the first quarter of 2012, Quebec City had just over 17.4 million square feet of office space - a fraction of the 49.4 million square feet in Montreal's office market, according to data from Colliers.

But that's up from 16.4 million square feet in 2009, in a city with a population of just under 766,000.

The total current vacancy rate for the office market is 5.2 per cent, with demand especially strong for Class B buildings, Colliers said.

What's attracting tenants, Maravita said, is the presence of an educated workforce, universities and comparatively cheap rents: average asking rent in Quebec City is $13.75 per square foot for class A space.

According to research from CBRE Ltd., just under 500,000 square feet of new multi-tenant office space in buildings up to 13 storeys high is now under construction in the city. Additional buildings are also under construction for company head offices.