Winnipeg’s industrial market has a current vacancy of 1.4%. Based on your nine years of experience in this market, what makes it ripe with opportunity and an attractive region to develop? Are there any challenges you foresee? 

Winnipeg needs modern industrial space to meet the demands of the new age. It requires facilities with contemporary features like high ceilings, advanced technology, efficient loading, and ample yard space for businesses to optimize their operations and accommodate modern industries. 

Despite the increasing demand, Winnipeg's industrial land market remains relatively affordable compared to other regions. Prices range from $300,000 to $600,000 per acre, making it attractive for expansion or relocation. However, available land is limited, with new development parcels expected in late 2023 and 2024, primarily in the CentrePort area.

The weighted average net rental rates decreased slightly from $10.18 to $10.04 per square foot, but this is due to the database composition. Rental rates in Winnipeg's industrial sector remain relatively high, as per the Colliers Q1 2023 Winnipeg Industrial Market Report. While we’ve seen rental rate escalation on trend with the rest of Canada, rental rates in Winnipeg still have room to grow in comparison to the national average and markets of similar size to Winnipeg. This presents opportunity in acquisition of existing inventory with upward potential and rental rates at premium price points for new, amenity-rich development. 

Construction costs in Winnipeg have historically been high due to factors like short build seasons and soft soils, resulting in additional expenses. However, tenant demand for new product is absorbing development as quickly as it comes to market, helping offset those higher development costs. 

CentrePort Canada, located in Winnipeg, is North America’s largest trimodal inland port and Foreign Trade Zone. How will its 20,000-acre footprint impact the industrial market in the region? How has it impacted other areas of real estate?

CentrePort emerges as the long-awaited answer to the rising demand for industrial land, catering to the needs of businesses today and tomorrow. With the successful sale of over 600 acres of industrial land in the past five years, CentrePort showcases the market’s dedication to meeting the requirements of thriving businesses. The exceptional absorption of these lands has surpassed expectations, resulting in limited availability for prompt service, underscoring CentrePort's undeniable value as a prime hub for industrial development and a key catalyst for economic growth in the region.

CentrePort and the surrounding area are witnessing a surge in demand for service-oriented retail and quick-serve options, igniting a ripple effect in the commercial real estate market. In response, developers are poised to introduce larger parcels specifically tailored to meet these demands. This strategic initiative aims to elevate CentrePort's allure and convenience, accommodating the evolving needs of the local community and firmly establishing the area as a promising destination for businesses in the vibrant Winnipeg market.

Your close relationship with the investment and development community, along with your expertise in the industrial market, has focused your work on new-build and build-to-suit spaces. What are the relevant forward-looking trends for those interested in entering the Winnipeg market, from both an investment and operational perspective?

One significant trend in the market is the success of build-to-suit developers who have available parcels for immediate development. Meeting the specific requirements of incoming organizations in need of modern buildings and ample compound space can be challenging in existing structures. The ability to provide efficient build-to-suit options within a 12-month timeframe becomes essential to meet the strict timelines and demands of tenants. Key features driving the attractiveness of build-to-suit properties include high ceilings for vertical storage capacity, truck yards, and a mix of dock and grade loading options. 

For those considering investment or operational opportunities in Winnipeg, it is crucial to be aware of the growing need for a flexible design on speculative projects to help cater to the wide variety of requirements and features driving demand. 

By leveraging these forward-looking trends, potential investors and operators can strategically position themselves to capitalize on the evolving industrial landscape.

With CentrePort and the affordable lifestyle that Winnipeg provides, what types of investors or organizations are investing in industrial infrastructure and operations?

Winnipeg and CentrePort have garnered interest from a diverse range of investors, including pension funds, large private groups, and various investor profiles, reflecting the broad appeal of the region. In the speculative build sector, pension funds and large private groups dominate, offering high-quality products at competitive prices. Their resources and expertise enable them to deliver facilities that meet tenant demands while setting a standard for quality. 

Tenants seeking suitable spaces should prioritize experienced landlords who can deliver exceptional build quality and timely fit-ups, ensuring facilities meet specific needs within budget and timeframe. Partnering with competent landlords provides confidence in seamless operations and a smooth transition. Experienced landlords safeguard tenant interests and ensure optimized facilities that meet operational needs today and offer growth opportunities within their larger holdings in the Winnipeg market.

Are there any developments you could speak to that have impacted the local industrial sector, and what opportunities do they present for future growth?

Hopewell Development's West Creek Industrial Park is a notable speculative development near Winnipeg. As part of CentrePort but located just outside the city boundary, it offers state-of-the-art industrial space for medium and large bay tenants at a lower operating cost compared to options within the city boundary. It is the only 36' clear offering in the market that provides tenants with a higher utility space at market rents and at a lower operating cost. West Creek is raising the standard for new built industrial space in the market.

With spaces ranging from 20,000 to 160,000 square feet at 36' clear, no other landlord in the market offers this. Hopewell's provision of higher ceiling heights demonstrates their market-leading expertise and provides tenants with the necessary utility in this high-cost environment.

One other notable development is Whiteland Real Estate’s BrookPort Industrial Park, consisting of over 200 acres of industrially zoned land, which has been a major driver of the success of the growing trucking industry. Land sales in this park have been ranging from $350,000 to $450,000 over the last five years, with most purchases intended for truck terminals and speculative development.   

As a top performing advisor in Winnipeg, how do you adapt to the developing market and changing needs of your clients to help them achieve their real estate goals? How does your personal experience in commercial real estate benefit your clients? 

Our dedicated industrial team, including Dan Bushuk, Tom Derrett, Murray MacRae, and myself, brings over 70 years of collective experience in managing transactions. We have unparalleled insight into Winnipeg's real estate landscape through active market engagement. Staying informed and offering tailored strategic solutions is our priority. With a strong network across Colliers' national and global platforms, we provide a comprehensive real estate solution.

Understanding transactions, including land acquisition, servicing, and build costs, is key. This enables us to guide clients through speculative or build-to-suit projects, providing clarity and strategic support. 

Comprehensive and up-to-date information gives clients a competitive advantage. Strong relationships with stakeholders enable effective negotiations and creative solutions. With our expertise, market knowledge, and strong relationships, we offer valuable insights for informed decisions and successful outcomes.