A cursory look at Winnipeg’s industrial real estate market shows a sector firing on all cylinders, but some troubling trends emerge after digging down into the data.
Vacancy dropped from 4 per cent to 3.8 per cent during the first six months of 2017 while absorption jumped by nearly 400,000 square feet during the same period, according to a new report from Colliers International. These positive metrics are pushing rents upwards, too, but one local expert is worried because there simply isn’t enough product out there.
“What little that is available is very old,” said Tom Derrett, Winnipeg-based vice-president of industrial at Colliers. “The space that’s been sitting around for months and years isn’t moving. It’s obsolete.”
New space that comes on line is being snapped up quickly, putting landlords squarely in the driver’s seat.
A lack of adequate space is also resulting in fewer deals getting done, and that means the province’s business community is falling short of its true potential.
“A lot of companies that can’t find product in Winnipeg say, ‘well, we’ll look at Saskatchewan.’ We’re losing opportunities for development and having people come to our province,” Derrett said.