Office and Industrial Real Estate Market
In 2015, Winnipeg’s overall office vacancy rate was stable at 12.1 per cent, on par with the national rate. Winnipeg’s ‘Class A’ office net rental rate was $17.58 per square foot—once again the lowest rate among major metropolitan centres. However, in comparison to the previous year, Winnipeg posted the second-highest growth. As demand increased from 2011 to 2015, Winnipeg’s office net rental rate grew by 1.9 per cent per year, which exceeded the national rate of 1.3 per cent.
Winnipeg may not offer Alberta boom times or the scale of Vancouver or Toronto, but when the tide goes out in other markets, tenants and investors are reminded of the stability that characterizes Winnipeg. Tenants’ desires for quality spaces and investors’ obligations to place capital have resulted in significant office construction cycles in many Canadian cities, which is expected to spur new office construction in Winnipeg.
Winnipeg recorded the second-lowest vacancies in industrial properties in 2015 at 4.8 per cent. The industrial rental rate was above the national rate at $7.34 per square foot and posted the highest year-over-year increase (6.4 per cent) among major cities across the country.
Low energy prices and favourable exchange rates are bolstering the Winnipeg industrial market, especially the manufacturing sector. Large orders at New Flyer Industries, a Winnipeg-based bus manufacturer, are a “harbinger of medium-term industrial activity” and property demand. Construction of modern industrial buildings, with high ceiling heights and efficient column spacing, will also increase as new land is prepared for development.