This week’s post will continue with what’s been a theme here with our blog for some time now. That being the projections for what the real estate market will be once this global pandemic begins to die out and some ‘normalcy’ returns to live in Canada. As to when that happens is anyone’s guess, and it’s safe to say that it’s likely going to take a long time after that to see the market return to its previously vibrancy. But that will happen, and what everyone who make their living in the real estate business needs to do is just weather the storm.
Part of weathering it for a lot of realtors is going to be working harder, both in the general sense and when it comes to doing what it takes to ensure there’s a sufficient amount of new clientele being brought into the business. Here at Real Estate Leads our online real estate lead generation service in Canada is an excellent way to get more out of your efforts there and it comes highly recommended from growth-minded realtors just like the majority of you will be.
Which leads us to today’s take on the recovery-to-be in the Canadian real estate market. With all the talk about Vancouver, Toronto and other bigger metropolitan areas, not enough is said about Winnipeg. The city that is the gateway to the West has long been one of the places where you can get the best bang for your buck when it comes to housing, and it is now becoming clear that may be equally true for commercial and industrial real estate in the not too distant future.
Repeat Performance Possible
Winnipeg’s economy bounced back from the ‘08-’09 recession in quite good shape, and it seems it may well be able to repeat that success following COVID-19. This is particularly noteworthy when you look at the neighbours to the West and markets like Alberta that have struggled with cratering oil markets manifesting themselves in the poor health of the economy and the real estate market along with it.
What we will be looking for is for owners to be divesting very good assets in Winnipeg, and if they do there’s going to be a ready list of buyers who see the opportunity with buying real estate in Winnipeg. Further, there is enough local and regional capital willing to take up opportunities to acquire these assets, and that’s not to mention qualified real estate investors from out of Province who should be taking a similar interest.
Industrial Sector Standing to Benefit
There is every reason to see Winnipeg’s industrial real estate market being particularly well-placed right now, and seeing more in the way of increased warehousing requirements is going to be a positive. There is also the possibility of more on-shoring playing a market-changing role (particularly if the move to reconsolidate manufacturing in North America takes hold as many expect it may) and Winnipeg is ideally situated to benefit from any such trend.
A new 250,000-square-foot package sorting facility being built for FedEx Ground and some 25 commercial condominium units under construction in South Landing Business Park are good examples of new and promising commercial development builds in Winnipeg.
Office Vacancies and Rents
Greater Winnipeg has the largest office inventory among Canada’s medium-sized cities, with almost 12.4 million square feet as of the first quarter of this year, and in drastic contrast to what we’re seeing in Calgary the first-quarter vacancy rates were 7.4% for class-A, 7.7% for class-B and 6.7% for class-C downtown buildings. This is an indication that businesses ARE setting up shop in Winnipeg, and with a revitalized commercial market comes a revitalized residential housing market.
Winnipeg Commercial Leasing
We may be able to safely assume that the Commercial Rent Relief benefits are not as urgently needed in Winnipeg as they are elsewhere in the country. We do know that there aren’t any data points indicating industrial or office buildings are worth less now than they were at the beginning of the year.
Interesting to note the major success story Skip The Dishes has chosen to consolidate its Canadian headquarters in the East Exchange district of Winnipeg, and speaking to a Commercial real estate expert in Winnipeg we’ve been informed that new offers from interested parties were coming in for retail properties for pre-COVID-19 market rents in mid-April and lease signings were taking place in shopping centres in early May.
Winnipeg’s downtown class-B office market has seen consistent demand and that continues to be the case right through the heart of the COVID economic slowdown, so this bodes especially well for what will the situation after we come out of it. There is reason to believe the greater general affordability with land values here will also apply to the next biggest city as you head west – Saskatoon – and that this is all a part of a general fairly positive outlook for commercial real estate in Canada outside of the major city centers in the country.
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