By Geoff Kirbyson
A pair of multi-million-dollar investments in CentrePort Canada has got players in Winnipeg’s industrial sector ready to party like it’s 1969.
Freightliner Manitoba, a local provider of service, sales and support to the trucking industry, is preparing to build a new 78,000-square-foot building on more than 13 acres in Brookside Industrial Park Phase III while Canada West Limited, a privately-owned real estate investment group headquartered in Edmonton, plans to build up to eight buildings encompassing 350,000 square feet.
“This is the best the industrial market has been in Winnipeg in 40 or 50 years,” said Martin McGarry, president and CEO of Cushman & Wakefield/Stevenson.
Not only is Canada West not based in Winnipeg, but it’s building largely on spec. President Dale Klein said it has one tenant already secured for its $60-million project and he’s expecting to confirm several more shortly.
He said national companies in other markets are building to suit with higher ceilings, so it only makes sense to do the same in Winnipeg.
“They’re renting per square foot but they’re (underestimating) the value of a cubic foot,” he said.
For example, he said typical (and old) industrial space in Winnipeg allows for stacking two or three 64-inch palettes. In the space that Canada West has planned, they’ll be able to stack five.
Two projects doesn’t make for an historical turnaround on their own, but McGarry said his company has sold 85 per cent of its 17 lots in five months and expects to be sold out before the end of the year.
“It’s a good time to be in industrial land development in Winnipeg, which is an industry that has been empty here for as long as I can remember,” he said.
“If you were a developer who wanted to bring in a new subdivision (in the past), you’d have to sit on lot inventory for years and years. We’ve caught up in a relatively fast period of time. You can see, 89 acres absorbed in six months? That’s unheard of.”
McGarry is quick to credit CentrePort, the 20,000-acre inland port and free trade zone situated near the Winnipeg James Armstrong Richardson International Airport and in the RM of Rosser.
“Industrial land absorption before CentrePort would have been zero acres over a few years,” he said.
The fact that Canada West is making such a large investment — the land goes for approximately $375,000 per acre —speaks volumes, he said.
“That’s a big amount of capital. That’s pure cash because you usually don’t finance land. That’s a big statement. You’re not investing that kind of money and building those kinds of buildings if you’re not confident that it’s all going to get absorbed,” he said.
Ken Talbot, president of Freightliner, said the decision to build new, and more than double its current space on Logan Avenue was made with both customers and employees in mind.
“We have staff sharing parking spots and we have staff sharing offices. We’re on top of each other. We’re the No. 1 retail truck provider in Manitoba but we’re in the No. 7 facility. We need to class that up a whole lot,” he said.
Shovels are scheduled to go into the ground on the more than $15-million project in early October with a ribbon cutting to follow 15 months later, he said.
The number of developers who have built on spec in Winnipeg’s industrial sector in recent memory can be counted on one hand, said Diane Gray, president and CEO of CentrePort.
“The developers believe we’re on the precipice of preparing for massive growth,” she said.
Canada West isn’t the only developer from out of province looking to expand in Winnipeg. Gray said a number of other companies have either optioned land or are in the process of closing land deals.
“We’re seeing out-of-town money come in. It’s a very strong signal about how our economy is doing right now,” she said.
geoffkirbyson@mymts.net