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Winnipeg Free Press - PRINT EDITION

Palliser plans outlet retail centre

By: Murray McNeill

Posted: 09/25/2012 1:00 AM | Comments: 0

WAYNE GLOWACKI / WINNIPEG FREE PRESS The Palliser Factory Outlet in Transcona should be joined in the building by other retail outlets.

Palliser Furniture plans to bring new life to its sprawling former Transcona distribution centre by converting a portion of the warehouse into factory-outlet-style retail space.

The proposed conversion of up to 90,000 square feet of the 463,149-square-foot building at 630 Kernaghan Ave. is one of the latest examples of how local building owners are finding new uses for buildings that have outgrown their original use.

"Call it the adaptive reuse of buildings, and it's very much alive in this city," Don White, immediate past chairman of WinnipegRealtors' commercial division, said in an interview Monday.

White and the division's current chairman, Tom Derrett, said such conversions aren't new. They've been happening for years in the Exchange District, where old factories and warehouses have been converted to office or residential buildings.

"But I think it's going to start becoming more and more common because construction costs are so expensive," White said, noting it's usually far cheaper to redevelop a structurally sound building than to tear it down and replace it with something new.

Palliser already operates a factory outlet in a portion of its building. Nearly a dozen other companies also rent space there, but they're all light manufacturing, warehousing, or distribution operations.

Bill Hilash, Palliser's general manager of real estate, said a supplier gave them the idea of converting the unused warehouse space into retail outlets.

"He said, 'Gee, I'd like to be in this building and sell flooring,' " Hilash said. "So we did some testing in the market, and people said they'd be interested (in renting space)."

"We think this is an excellent reuse of a building," added Diane Dawiskiba, Palliser's vice-president of corporate services. She said they envision up to 12 retail units, and their target market is local, independently owned retailers, not national chains.

Hilash said they don't have any tenants signed up yet, "but we're in discussions with several at the moment, and I think we'll see our first retailers in there before year's end."

Before they can sign up any new retail tenants, Palliser needs the city to rezone the property for both light industrial and retail. Dawiskiba said the city's standing policy committee on property and development has already given it the green light, and now it's awaiting council approval.

Derrett said converting buildings to a higher and better use is a natural progression in the growth of a city. He noted the area north of the Polo Park mall used to be an industrial area. When the demand for new retail space took off, much of it was converted to retail space as an extension of the Polo Park hub.

Another new example of space in an industrial building being converted to other uses is the one-storey manufacturing facility at 830 King Edward St. About half of that building is being converted to flex-style office/retail showroom/warehouse space.

One of the property's listing agents, Dave Bergman of RE/Max Professionals, said Gamma-Dynacare Medical Laboratories is leasing about half of the building, and the rest -- about 53,000 square feet -- is being gutted and converted to flex space.

He said about 9,000 square feet of it will be ideal for office or retail-showroom space, and the rest could be converted to units that have a showroom or office at the front and warehouse space in the back. Some could be converted to gym space, he added.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 25, 2012 B5

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