Winnipeg office stats disguise slump

Second-lowest vacancy rate in Canada fails to impress analyst

By
Western Investor
August 11, 2016





sask winnipeg towers
Nearly a tenth of Winnipeg’s downtown offices are vacant. - Submitted.

 

You can excuse Wayne Johnson if he doesn’t get too excited about Winnipeg having the second-lowest downtown office vacancy rates in the country.

Not when so much available space is sitting empty.

The author of the most comprehensive report on commercial vacancy rates in Winnipeg — the semi-annual Johnson Report — pegs Winnipeg’s downtown vacancy rate at 7.6 per cent, down 1 per cent from a year ago. 

That’s even lower than the latest findings from CBRE, which reported that the downtown office vacancy rate has dropped 2 per cent over the past 12 months to 9.1 per cent at the end of June 2015.

Johnson said 7.6 per cent is still Winnipeg’s second-highest rate in the past decade and is nearly double the 3.9 per cent of 2008.

The commercial sales and leasing specialist with Royal LePage Dynamic Real Estate compared the accolade to the one-eyed man being king in the land of the blind.

“I don’t know how anybody can interpret a 9 per cent vacancy rate as being a good thing. I don’t want to say the market is stagnant but things aren’t getting better and they’re not about to. There is nothing on the horizon that would suggest this market is going to be improving in any way,” he said.

The total footage of vacancy in Class A, B and C space is currently 660,000 square feet, up from 400,000 square feet in 2007. That includes Manitoba Hydro building, which opened three years ago and consolidated its operations into a single 695,000-square-foot facility, bumping up the downtown vacancy rate.

Johnson foresees the same sort of thing happening in two years when the first building of True North Square opens its doors. Some major tenants, such as law firm Thompson Dorfman Sweatman, have already announced plans to move into the development, leaving more vacant space behind in less classy downtown buildings.

Johnson doesn’t believe any new head offices are in the offing for Winnipeg, although NewLeaf Travel Company recently opened in old terminal building at Richardson International Airport.


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