A new report suggests that Winnipeg is seeing the strongest downtown office market in decades.
“It is a very optimistic and active time, more so than at any time over the last 30 years in Winnipeg,” Winnipeg-based Wayne Sato, a Cushman & Wakefield broker and office leasing and sales vice-president, told the Real Estate News Exchange.
Cushman & Wakefield forecasts Winnipeg’s current 4.3 per cent office vacancy rate will rise to the 7 per cent range by 2019, but this still places it among the lowest office vacancy rates in Canada.
Sato pointed out there was no significant new construction of Class A office space in Winnipeg for about 25 years before 80,000 square feet was added with Centrepoint in 2015. “Once the market is introduced to that, more and more tenants started saying ‘That’s what we need.’”
While $19 per square foot net was the former high-water mark for Winnipeg office rents, Centrepoint pushed the figure to $25.
No downtown buildings have a significant amount of empty space, with the exception of an 11-storey former Canada Post building that the City of Winnipeg is trying to sell. The city purchased the tower in 2009 and intended to resell it for $18 million, but officials later discovered it required $20 million worth of repairs. It has sat vacant ever since.
New construction is expected to alleviate some of the Class A office demand, starting next year.
True North Square, a $400 million development, will include two mid-size office towers. Its 17-storey, 365,000-square-foot Scotiabank Tower will be the first to be completed next summer. Tower 2, a 24-floor building with 200,000 square feet of commercial and residential space, is scheduled for completion in 2019.