By Trevor Clay
One of the most common questions I’m asked these days is about the impact of True North Square on the Downtown Winnipeg office market, and more specifically on Portage and Main. It seems that the rare sight of cranes in the downtown causes a cautious market like Winnipeg’s to become fearful of rising vacancy rates.
In my view — as exciting as this development is — its overall impact on the downtown office market will be muted.
The total amount of leasable office space in True North Square is approximately 300,000 square feet. This represents 3.4 per cent of the total downtown office market of 8,850,000 square feet.
Of this office space, over 40,000 square feet has been leased to Scotiabank, which has now sold its building at Portage and Main. This will not impact market vacancy in a significant way.
An additional 60,000 square feet has been leased to Thompson Dorfman Sweatman. While this does leave a similar-sized vacancy at 201 Portage, this prominent space will surely attract interest from several high-profile tenants in the market.
The remaining office space to be leased is 182,695 square feet. If all of this space is absorbed by downtown tenants, this would result in an increase to downtown vacancy of two per cent. While this is significant, it is certainly not at a scale that we should be overly concerned about.
As the downtown continues to improve, we are seeing inefficient office buildings being considered for redevelopment to meet growing residential demand. The sale of the Medical Arts Building to Timbercreek is an excellent example of this and there are more on the horizon. Eliminating this building from the market, which is 50 per cent vacant, will result in significant gains for the downtown market as a whole.
Developments such as True North Square will also create more interest in the downtown for tenants who are in or may consider relocating to the suburban market. Stantec is the best example of this process, as the construction of Centrepoint encouraged them to move a 50,000-square-foot office space from Southwest Winnipeg into the downtown. This pull is likely to get stronger with better residential opportunities, more retail amenities and more attractive office space.
Despite all of the excitement around True North Square, Portage and Main is still the most relevant corner in Winnipeg from a business perspective. The connectivity of the underground circus is unrivalled, and with over 1.5 million square feet of space immediately surrounding this connection, it will continue to be Winnipeg’s most vibrant business hub. While there may be some short-term vacancy increases, in the long term, the presence of our most historic intersection will remain intact.
(Trevor Clay is the chair of the Commercial Division of WinnipegREALTORS®.)