A low-flying loonie, a growing U.S. economy and an expanding manufacturing sector are teaming up for a rosy outlook for commercial real estate in Manitoba’s two biggest cities.
The biggest buzz in Brandon is happening at the Shoppers Mall where Sobeys is relocating as an anchor tenant into a 62,500-square-foot space that was abandoned by Target in the spring of 2015. The launch of its Sobeys Extra banner, which will offer innovative full-service departments, a multi-use community room for events such as cooking classes, in-store experts, including a chef and well-being counsellors, as well as a new store facade, is easily a seven-figure renovation.
“It’s a big boost to Brandon that a company is prepared to move one block over and spend that kind of money. It’s a big ticket,” said Glen Tosh, president of the Brandon Real Estate Board.
Shoppers Mall, which has more than 90 retailers, is also preparing to welcome GoodLife Fitness-owned Coed Club into a 25,000-square-foot space that used to be part of the home to Canada Safeway, as well as a number of new brand-name eateries.
“Brandon is a stable, consistent marketplace and a good place to do business,” he said.
The Conference Board of Canada agrees and is particularly bullish on Brandon. In its latest Mid-sized Cities Outlook report, the Ottawa-based research house predicts real GDP growth in the southwestern Manitoba city will recover from a “temporary slowdown” in 2015 to hit 2.2 per cent this year.
“A healthy U.S. economy and low Canadian dollar are providing a lift to Brandon’s manufacturing sector, including its key agri-food processing industry. Accordingly, we expect manufacturing output to grow by 3.3 per cent this year,” the report said.
The city’s employment is also projected to jump by 2 per cent this year, according to the Conference Board.
A further boost is coming from the provincial government, which is committed to spending $5.5 billion over the next five years on infrastructure projects in Brandon and Winnipeg.
Chief on the docket in Brandon is replacing the First Street Bridge, which is expected to cost $50 million by the time it’s completed late next year, and more than $10 million in upgrades to the city’s airport.
“For a mid-sized city, Brandon is doing particularly well,” said Alan Arcand, associate director of the Centre for Municipal Studies with the Conference Board, noting that Brandon’s population hit 56,000 last year.
Ordinarily people shouldn’t get overly excited about the economy when public money is being spent but Arcand said an exception should be made in these cases because the current and upcoming projects will not only improve the quality of life for Brandon’s residents but also benefit the
Brandon Mayor Rick Chrest said city council is also looking at the possibility of annexing some land to the south of the city that could spawn a “significant commercial and retail node.”
The commercial sector continues to be busy in Manitoba’s premier city.
Wes Schollenberg, managing director of retail, sales and leasing at Avison Young’s Winnipeg office, said the construction of True North Square,a $400-million development that will include four downtown towers, is forcing other players to invest in their properties in order to remain competitive for tenants.
For example, Artis Real Estate Investment Trust is spending $26 million to “redo the skin” on 360 Main Street, one of the three towers at the historic corner of Portage and Main. Schollenberg believes much of the confidence in Winnipeg’s real estate market springs from the election of Brian Pallister’s government.
“Things aren’t so bad here. Alberta got punched in the stomach and we didn’t. We’re not susceptible to the highs and lows. If you go to construction sites in Winnipeg, you’ll see a lot of Alberta licence plates,” he said.