Winnipeg commercial owners holding on tight to supply

Low dollar volume in 2016 was due to a lack of larger properties coming onto the market, says Colliers International

By
Western Investor
February 9, 2017





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Most of Winnipeg’s commercial real estate is in very few hands – and they don’t want to let go. | City of Winnipeg

 

With happy owners of so many of Winnipeg’s biggest and best buildings, it might take succession issues among families with large real estate holdings to drive up sales activity in the city in 2017.

Don White, executive vice-president of national investment services in Colliers International’s Winnipeg office, said while the number of commercial transactions in 2016 was on par with the year before, the dollar volume fell way off.

There were 119 properties sold in the city during the first 11 months of the year for $392.9 million, according to recent statistics compiled by Colliers, just one fewer than in all of 2015. That year’s 120 deals, however, were worth $646.9 million.

“The lack of sales activity isn’t being driven by the fact that nobody wants to buy. Product here is difficult to find. Everybody who owns it wants to keep it. There just haven’t been that many big properties come on the market,” White said.

The top driver of investment trading activity is availability, and with a combination of so little speculative building, a lack of serviced industrial land and shopping centre portfolios that are tightly held, something will have to give in order for sales to pick up.

“We’re going to need to see some larger families with larger portfolios who decide to liquidate part of their holdings, either for philanthropic, succession planning or other reasons,” White said.

Another possibility is buildings being put up for sale by private investors who aren’t comfortable with the increasing complexity required to be in the sector, including competitive leasing, debt structures and permitting issues, he said.


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