by Geoff Kirbyson
If you’re waiting for an update on the health of Winnipeg’s industrial real estate market, QuadReal Property Group has just what the doctor ordered.
The Vancouver-based real estate investment and development company has just broken ground on a new project in northwest Winnipeg without having signed up a single tenant.
The multi-million-dollar investment will be a one-storey, 175,000-square-foot building will 28-foot-clear ceilings, bays that are up to 8,800 square feet in size and up to 70 truck-level doors.
You need a good memory to remember the last time a development of this magnitude was done on spec but Dilpreet Mathauda, director of leasing at QuadReal in Winnipeg, isn’t worried in the slightest.
“It’s unprecedented for QuadReal to be building that large a building on a completely speculative basis. We’re confident in the fundamentals of the market. We’re looking at a market that has a very old and aged product for industrial,” he said.
“There is lots of interest. We’re confident enough with the market and the need for this that we’re moving forward without a single transaction. We didn’t need a signed lease to kick this off.”
The Northwest Business Park will be located west of Route 90 near Inkster Boulevard.
Assuming construction proceeds as planned, tenants will be able to move into their new digs in the middle of next year.
Due to the proximity of major thoroughfares such as Route 90, the Perimeter Highway and CentrePort Canada Way and the James Richardson International Airport, it’s expected that most tenants will be in light industrial, manufacturing or logistics.
“The building will serve multiple uses for the warehouse users. It’s not super specialized. We made it so it can handle different kinds of industrial use,” he said.
Rates will be approximately $12 per square foot on five and 10-year deals, which will include some tenant inducement allowances.
QuadReal is no stranger to Winnipeg as it has property in all quadrants of the city, including the St. James Business Centre on Notre Dame Avenue.
It has a portfolio worth $27.4 billion that spans 23 cities in 17 countries. In Canada, the portfolio includes 40 million square feet of commercial real estate and 12,000 residential rental suites.
Over the past two years, more than 400,000 square feet of industrial space has welcomed new businesses and operators across the city. Most of the recent attention on the industrial sector has centred on the activity at CentrePort near the airport.
But Mathauda said this town is big enough for all of the new activity. In fact, because of Winnipeg’s steady population growth, once it hits one million people — which should be 2035 according to a recent City of Winnipeg report — it will start attracting companies that use that milepost as a barometer for entry and that’s going to take industrial demand to a new level altogether.
“We are very enthused and optimistic about where the city is headed. We love the Winnipeg market. It’s steady Eddie. You don’t see the volatility here that you see in Alberta. We’re committed to the portfolio in Winnipeg and we want to grow and develop here and that’s exactly what we’re doing.”
The new development isn’t bad news for older industrial buildings, either. When they’re vacated by larger users who need newer amenities, smaller mom-and-pop operators move in, he said.
“It’s not a situation where (our project) is a different asset class, like office, where a project like this has a big ripple effect on other buildings and rates. It will help Winnipeg step up its game up another notch,” he said.