Winnipeg’s commercial real estate market enjoyed another brisk year with all segments of the market responding to the buoyant economy. Canada’s leading economic forecasters predict that growth will be in the range of 3.0% for Manitoba in 2006. With its highly diversified economy, Manitoba rarely sees the kind of boom-and-bust cycles that many other provinces experience. It is this continuing level of stability that keeps the economy firing on all cylinders. Low interest rates and high consumer confidence levels continue to support increased housing starts and retail sales. Manitoba is predicted to be one of only two provinces to record an increase in housing starts in 2006.
Several major capital projects are now underway which will further bolster the non-residential construction sector in Winnipeg. Construction has started on the 690,000 square foot Manitoba Hydro downtown office building, which is expected to set new standards for “Green” buildings. The $560 million airport redevelopment project scheduled for completion in 2009 is also underway. In addition, funding has been committed for the $300 million Canadian Museum for Human Rights, slated for completion in 2010, which is expected to become an international tourist destination.
Manitoba and Ontario have signed a $500 million hydroelectric deal, representing the first phase of a power grid linking the east and west. The resulting construction and operation will generate an estimated $5.6 billion in economic activity in Manitoba over the next decade.
The Winnipeg office market has followed the national trend with a slight decrease in vacancy and appears poised to continue to strengthen as a result of favourable economic conditions. Canada Revenue Agency’s lease of almost 50,000 square feet in the Commodity Exchange Tower and Great-West Life’s sublease of 37,000 square feet in the Air Canada building were significant contributors to the strengthening of the office market. Expect to see a slight tightening of the office market during 2006.
With a few larger industrial facilities coming to market, industrial vacancy appears to be on the rise. However, with tenant demand expected to quickly absorb these availabilities, the market appears ready for new construction of higher ceiling, contemporary industrial buildings. Overall, the Winnipeg industrial market reflects the stability of the city’s economy with a vacancy rate still below 4.0%.
Winnipeg Market at a GlanceMarket
- Office Market Size – 16.3 million sq. ft.
- Office Market Vacancy – 6.2%
- CBD Class A Vacancy – 7.9%
- Industrial Inventory – 75.7 million sq. ft.
- Industrial Vacancy – 3.5%
Source: The Barnicke Report, Global Views 2006