A resurgence in government leasing has helped Winnipeg’s office leasing market begin 2025 on a strong footing, with absorption of space hitting its highest levels since 2023.
Colliers’ first-quarter snapshot of the market reported that net absorption totalled 43,421 square feet in the first quarter, pushing downtown vacancies to 15.4 per cent and lifting lease rates to an average of $15.44 per square foot. Total market vacancies sit at 13.1 per cent, down from 14.6 per cent at the end of 2024. It was the second-lowest on the Prairies after the Saskatoon market, which reported vacancies of 11.3 per cent.
With no new supply under construction, the stage is set for improving conditions for the foreseeable future.
“Given the current economic climate and high construction costs, we anticipate that development activity will continue to lag in 2025,” Colliers reported.
The opposite holds true for Winnipeg’s industrial market, where a steady stream of completions and potential economic head winds have slowed absorption of industrial space.
Winnipeg saw 92,224 square feet of industrial space added in the first quarter even as 28,040 square feet was returned to the market. This marked the first quarter of negative absorption in the market since 2023.
The dynamic boosted vacancies to 2.7 per cent, on par with markets in Saskatchewan yet still below levels seen in Alberta and B.C.
The strongest segment of the city’s industrial market was on the city’s east side, which reflected the overall stable demand in areas where limited new supply exists. The stability of industrial demand is reflected in average asking rates rising six cents to $10.91 per square foot.
With no new industrial space under construction within Winnipeg, conditions are likely to stabilize as tenants work through existing options.
