Winnipeg’s Industrial vacancy rate increased by 50 basis points from the previous quarter, largely due to existing inventory coming back on the market. With the rise in vacancy, Winnipeg’s industrial weighted average asking net rental rate decreased from $10.04 per square foot to $9.75 per square foot. This can be largely attributed to larger older industrial product coming back on the market at a lower net rent.
- Strong market demand for industrial space has encouraged developers, investors, and owner-occupiers to invest in industrial land, with a large concentration of the demand coming from the Northwest quadrant of the city. Despite the increasing demand, Winnipeg’s industrial land market remains relatively affordable compared to other regions within Canada, with prices ranging from $300,000 to $600,000 per acre.
- High construction costs continue to factor in the Winnipeg industrial market, as newly developed projects require higher rental rates to ensure prudent economic project viability. However, this has not slowed down Winnipeg’s industrial development pipeline with over 680,000 square feet of industrial product currently under construction. Much of this product will be completed and arrive on the market before the end of the year. Tenant demand remains strong for newly built, amenity-rich spaces as they are quickly being absorbed upon their market availability.