Regional Roundup: Five-year plan will see about $600 million pumped into Winnipeg's "SHED" zone
You can excuse Winnipeggers if they think they've travelled back in time to the turn of the 20th century.
Back then, Winnipeg was one of the fastest growing cities in the country - it peaked at No.3 for population around 1912 - and quickly became known as the "Chicago of the North" due to the seemingly endless flurry of growth and activity.
The flurry, of course, eventually fizzled and the Manitoba capital lost its momentum to cities such as Calgary, Edmonton and Ottawa. Sure, it has long been a major center in Canada, but it lacked the spark of yesteryear.
That was then, however, and this is now.
There's a new attitude in Winnipeg but it's not just lip service - it's being backed up by investment and action.
Much has been made in recent months about the return of the Winnipeg Jets to the city and the pending arrival of IKEA in late 2012. While there's no questioning their impact and high profile, these two developments are hardy operating in isolation.
Wrecking balls are poised to kick-start what could be the most significant overhaul of the downtown in Winnipeg's history. Dubbed the sports, hospitality, and entertainment district, or SHED, this five-year plan to spend upward of $600 million is poised to revitalize an 11-block area that incluedes the MTS Centre, home of the Jets, the Winnipeg Convention Centre and the Metropolitian and Burton Cummings theatres.
Shortly after a pair of old building on Portage Avenue across from the MTS Centre are demolisted ealry in the new year, consrtuction will begin on a multi-use facility featuring five storeys of retail and office space, topped by a 14-storey hotel with 154 roooms.
Cindy Rodych, vice pressident at Stantec, the architect of record for the SHED, said a key part of the development will be the transformation of a surface parking lot in-between the MTS Centre and the convention centre. She said much of the SHED is shaped like a doughnut and this lot is the doughnut hole.
"Something has to happen on this site. A SHED isn't and can't just be a district; it has to be a destination. What has been proposed in the master plan is a destination element for the public, active, vibrant, urban and an entertainment-focused area, " she said.
Rodych said the hope is that the area will ultimately resemble the intersection of Dundas and Yonge streets in Toronto.
Much of the anticipated success for the SHED is contingent on downtown Winnipeg attracting more workers - say another 1,000 - during the day. Rodych said with Stantec moving between 200 and 300 staff into its new headquarters for the first SHED project, she doesn't see this being a problem.
This new activity and more is translating into a healthy real esate market for the city, experts say.
Retail vacancy rates are currently sittting around 3.5 per cent, after being as high as 5 per cent over the last decade. They're even lower right now in the power centre sector at 0.7 per cent.
Office vacancy rates are on the upswing at 6.9 per cent, a rise from 4 per cent a few years ago, thanks primarily to the contraction of Manitoba Hydrp's new downtown office tower a couple of years ago. The addition of the nearly 700,000-square-foot building has caused a bit of a glut in the market.
"When you add that much space to the market and pull all their occupancies from other areas in the city, you create an articial high on vacancy. That will smooth out over time as absorption occurs," said John Pearson a commercial leasing specialist with Shindico Realty Inc.
Industrical vacancy rates, meanwhile are hovering in the 5 per cent to 7 per cent range.
Despite the relative lack of activity in Winnipeg's industrial market, there is no question that it's the dominant force in the city's commerical real estate sector. There is approximately 70 million square feet of industrial space in Winnipeg compared with just 15 million square feet in each of the retail and office markets.
Pearson said a combination of positive factors, including the new air terminal building and the excitement surrounding the hockey team, is attracting investment in the downtown area for reaurants, hotels, and offices.
The construction of a new stadium at the University of Manitoba for the CFL's Winnipeg Blue Bombers, which is scheduled to oepn next spring, has also created a substantial investment opportunity for the continued redevelopment of the area north of Polo Park Shopping Centre. That's where the old Winnipeg Arean was demolished several years ago and whether the antiquated Canad Inns Stadium hosted its last football game a few weeks ago. The football staduim is scheduled to be torn down next spring.
Wayne Pratt, managing director of the Winnipeg office of Colliers International, said there is regular sales and leasing activity occuring across all real estate sectors and the outlook for the supply and demand balance is good.
He said rents are going to have to increase, however, in order for any construction cranes to appear on the skyline.
Article taken from January 2012 Edition of Western Investor (www.westerninvestor.com)