Build it and they will come is the guiding principle of industrial developers in Winnipeg, which is experiencing the same historic demand for industrial space as markets across Canada – with one exception.
There’s little suitable land available for development.
“The biggest problem has been getting serviced land available,” said Paul Kornelsen, vice-president and managing director for brokerage CBRE Ltd. in Winnipeg.
The fact was highlighted in CBRE’s market review for the first quarter, where Winnipeg had the least new construction of any major market in Western Canada. All of it is being built on spec, and future projects will take months to begin.
“With a lack of serviced land available for new construction, it is projected that construction on new projects won’t begin for 12-16 months,” the report stated.
The lack of options in Winnipeg proper has sent many developers to the Rural Municipality of Rosser, on the city’s northern edge. It is home to CentrePort Canada, a 20,000-acre development that lays claim to being “North America's largest trimodal inland port.” It’s also one of nine foreign (free) trade zones in Canada, giving companies access to tariff and tax exemptions on the purchase or import of various products.
Kornelsen said several companies have announced new developments there in recent months, which will ease but not resolve the shortage. Winnipeg’s industrial availability in the first quarter was 2.8 per cent on an inventory of 77.7 million square feet.
“We have historically low vacancy rates in our industrial portfolio, historically high asking rents and just an insatiable demand for product, and particularly new generation product,” he said. “By the time anything’s ready to come to market, it’s leased.”
One of the larger projects in the works is West Creek Industrial Park, a 294,150-square-foot development by Hopewell Development Corp. of Calgary. The project, located in CentrePort will have two buildings providing much-needed large format space.
Shovels are already in the ground for the second phase of MMI Asset Management Ltd.’s Steele Business Park, also in CentrePort. The first phase of 80,190 square feet broke ground in October 2020 and is now 75 per cent leased. The second phase will have 66,200 square feet and is set for completion later this year. No tenants have been secured.
The final phase will have 80,190 square feet, giving the development a total of 226,500 square feet.
Other projects are in the pipeline.
“Some of the other big names are quietly working through permitting on speculative builds,” Kornelsen added.
