Avison Young highlights market's challenges and potentials
Sustained demand for industrial product coupled with limited options will continue to place upward pressure on net rental rates in the Winnipeg market throughout 2023, according to Avison Young.
“This increase can be attributed to the limited number of options available to owner occupiers to purchase coupled with the sharp increase in construction costs and cost to build new,” the commercial real estate firm said in its latest market analysis.
At present, more than 600,000 square feet of industrial space is under construction in Winnipeg – a volume that Avison Young is expecting to get snapped up quickly.
The market will also benefit from strong momentum imparted by its 2022 performance. This was illustrated by a continued annual decline in vacancy levels, which stood at 3% as of Q4 2021 and before going down to 2.2% in Q4 2022.
“The unrelenting demand for space with little to no inventory has increased net rates,” Avison Young said, adding that asking rental rates went up from $10.40 as of Q3 2022 to $10.46 as of Q4 2022.
Sale price per square foot for industrial product in Winnipeg surged by 10.87% annually, from $138 sf as of Q4 2021 to $153 sf as of Q4 2022.
“The increase can be attributed to the limited number of options available to owner occupiers to purchase coupled with the sharp increase in construction costs and cost to build new,” Avison Young said.
