1st Quarter 2014 - Winnipeg Office Market Beat

MARKETBEAT
OFFICE SNAPSHOT
WINNIPEG, MANITOBA
Q1 2014
A Cushman & Wakefield Alliance Research Publication
Overall Vacancy
Direct Net Asking
Rents (psf/yr)
YTD Absorption (sf)
For more information, contact:
Wayne Sato, Vice President, Office
204-934-6207
[email protected]
0.7 pp
4.1%
(975)
(3,698)
(2,723)
$25.00
12.0%
$20.00
10.0%
8.0%
$15.00
6.0%
$10.00
4.0%
2.0%
$0.00
0.0%
2010
2011
2012
2013
TOTAL GROSS RENT
Q1 2014
OVERALL VACANCY RATE
ABSORPTION
300
-100
-200
-4
-27
0
-41
100
145
103
200
2010
2011
CBD
Cushman & Wakefield
Licensed to CWL Realty Inc.
200-260 St. Mary Avenue
Winnipeg, MB R3C 0M6
www.cushmanwakefield.com/knowledge
8.6%
$12.67
-121
The Suburban class C overall vacancy rate was 9.6% this quarter,
down 1.0 percentage points from last quarter. 34,726 sf was leased
at 717 Portage Avenue to a yet-to-be-announced tenant. The building
had been fully vacant for over a year.
7.9%
12 MONTH
FORECAST
$5.00
sf (thousands)
The class B Suburban overall vacancy rate held stable at 4.9% during
the first quarter of 2014. Since the first quarter of 2013 the overall
vacancy rate has decreased by 2.7 percentage points, from 7.6%.
Y-O-Y
CHANGE
DIRECT RENTAL VS. VACANCY RATES
The overall vacancy rate in the class C CBD market increased in the
first quarter of 2014 to 10.8% from 10.6%. The class C market has
high supply and low demand and continues to struggle to attract new
tenants.
The class A Suburban market overall vacancy rate decreased slightly
to 14.4% in Q1 2014 from 14.7% in Q4 2013. The weighted average
net asking rent for available space in this market class remains
unchanged at $21.24 psf.
Q1 2014
$12.17
28
The class B CBD overall vacancy rate was 11.1% at the end of the
first quarter of 2014 – an increase of 0.9 percentage points from the
previous quarter. This market class has several large block vacancies,
including 67,000 square feet (sf) at 400 Ellice Avenue and three full
floors totaling 37,833 sf at 330 St. Mary Avenue.
Q1 2013
-1
Within the CBD, the class A overall vacancy rate remained at 3.1%
during the first quarter of 2014. The weighted average net asking
rents for available space in the class A market also remain stable,
averaging $19.84 per square foot (psf).
STATS ON THE GO
245
Winnipeg’s overall office vacancy rate rose to 8.6% in the first quarter
of 2014, up from 8.4% in Q4 2013. This is attributed to increases in
the Central Business District (CBD), where both B and C class
vacancy rates are up versus one quarter ago, resulting in a 0.4percentage point increase across the CBD. The overall vacancy rate
in the Suburban market fell to 7.8% from 8.5% as the class C
Suburban market continues to be a very strong market class.
Activity is expected to pick up as momentum in the Downtown
continues to build, with construction on Centrepoint and the
Winnipeg Convention Centre expansion nearing completion.
-102
OVERALL VACANCY RATE RISES
OUTLOOK
There has been little leasing activity to report in the first quarter of
2014. Winnipeg experienced one of the coldest winters in more than
a century, which in turn impacted decision makers and resulted in
very few new deals recorded; the majority of the activity in the office
market was expansion and renewal based.
psf/yr
ECONOMIC OVERVIEW
Manitoba’s real GDP growth is estimated to be
2.0% for 2014, which is below the national
average of 2.3%. The unemployment rate in the
first two months of 2014 averaged 5.5%, the
third lowest amongst provinces and well below
the national average of 7.0%. (Source: Conference Board of Canada).
2012
2013
YTD 2014
Non-CBD
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
1
WINNIPEG, MANITOBA
SUBMARKET
INVENTORY
OVERALL
VACANCY
RATE
DIRECT
VACANCY
RATE
UNDER
CONSTRUCTION
YTD
CONSTRUCTION
COMPLETIONS
CURRENT
QUARTER
ABSORPTION
YTD
OVERALL
ABSORPTION
WTD. AVG.
NET
RENTAL RATE*
WTD. AVG.
GROSS
RENTAL RATE*
Class A
2,838,471
3.1%
2.8%
81,069
0
(1,304)
(1,304)
$19.84
$36.34
Class B
3,587,840
11.1%
10.3%
0
0
(32,073)
(32,073)
$13.84
$26.42
Class C
3,717,150
10.8%
9.8%
0
0
(7,841)
(7,841)
$10.44
$19.71
10,143,461
8.8%
8.0%
81,069
0
(41,218)
(41,218)
$12.95
$24.48
Class A
202,385
14.4%
14.4%
0
0
643
643
$21.24
$29.29
Class B
1,407,068
4.9%
4.9%
0
0
0
0
$11.62
$18.42
Class C
1,535,457
9.6%
7.9%
0
0
36,877
36,877
$11.39
$18.32
3,144,910
7.8%
7.0%
0
0
37,520
37,520
$11.48
$18.35
13,288,371
8.6%
7.8%
81,069
0
(3,698)
(3,698)
$12.67
$23.29
CBD TOTAL
SUBURBAN TOTAL
WINNIPEG TOTALS
* RENTAL RATES REFLECT ASKING $PSF/YEAR
MARKET HIGHLIGHTS
Significant Q1 2014 Lease Transactions
SUBMARKET
TENANT
BUILDING CLASS
717 Portage Avenue
Suburban
Unknown
C
34,627
Unit 1901- 360 Main Street
CBD
Usand Group
A
2,596
Significant Q1 2014 Sale Transactions
SUBMARKET
BUYER
PURCHASE PRICE
SQUARE FEET
240 Kennedy Street
CBD
Private
$4,850,000
29,307
3525 Pembina Highway
Suburban
Private
$576,000
MAJOR TENANT
COMPLETION DATE
BUILDING SQUARE FEET
BUILDING SQUARE FEET
Significant Q1 2014 Construction Completions SUBMARKET
SQUARE FEET
4,624
N/A
Significant Projects Under Construction
SUBMARKET
MAJOR TENANT
COMPLETION DATE
311 Portage Avenue at Centrepoint
CBD
Stantec Inc., ALT Hotels
Q3 2014
200,000
111 Lombard Avenue (Heritage Retrofit)
CBD
HRSDC
Q3 2014
132,000
257 Osborne Street
Suburban
TBD
Q3 2014
42,280
Cushman & Wakefield
Licensed to CWL Realty Inc.
200-260 St. Mary Avenue
Winnipeg, MB R3C 0M6
www.cushmanwakefield.com/knowledge
For more information, contact:
Wayne Sato, Vice President, Office
204-934-6207
[email protected]
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 20143 Cushman & Wakefield, Inc. All rights reserved.
2

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