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Spreading the good news

Distribution centre shows city again seen as legitimate hub

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The first new distribution centre in more than a decade, and only the second in 30 years, is under construction in northwest Winnipeg.

The city's largest industrial landlord -- British Columbia Investment Management Corp. (bcIMC) -- is building a 152,000-square-foot, multi-tenant distribution centre at 200 Discovery Pl. in Inksbrook Industrial Park.

A spokesman for Bentall Kennedy, which manages bcIMC's 2.3 million square feet of industrial space in Winnipeg and its development projects here, said a 60,000-square-foot anchor tenant has already been signed. And talks are ongoing with several other prospective tenants.

"The interest levels are very strong," Shaun Rocan, vice-president of leasing and general manager of Bentall Kennedy Winnipeg, said in an interview, adding the building should be ready for occupancy next September.

Another local industrial leasing specialist -- DTZ Barnicke Winnipeg president Martin McGarry -- predicted the bcIMC project could trigger a number of similar projects over the next few years.

McGarry, who was the leasing agent for the new anchor tenant, said thanks to the efforts of local organizations such as Yes! Winnipeg and Centre Port Canada, Winnipeg is once again being viewed as a legitimate distribution hub for North America.

The Manitoba economy also continues to expand, the demand for industrial space is strengthening, and the city's overall industrial vacancy rate remains at historically low levels-- a mere two per cent, according to the latest market report from Royal Lepage Dynamic commercial agent Wayne Johnson.

"The bottom line is that everything is pointing in the right direction for Winnipeg's resurgence as a distribution centre," McGarry said.

He said Winnipeg was a major distribution hub until the 1980s, when a rash of companies moved their regional distribution centres to fast-growing Calgary.

He said the last "pure" distribution centre he recalls being built in Winnipeg -- there have been a few others that were a mix of distribution, office and light industrial space -- was a 112,558-square-foot (10,456-sq.-m) facility Healthcare of Ontario Pension Plan built in 2000 on Omands Creek Boulevard. And before that, it would have been the early 1980s.

"But it's all about the cost of distribution, and Centre Port Canada has been making the case lately that it's cheaper and easier to ship from here than almost from anywhere else (in North America)," he said.

"There are some big, big fish floating around looking at Winnipeg right now," he added. "And everyone is going to be watching this (new building) very closely" to see how quickly it fills up.

McGarry said bcIMC is taking a risk by proceeding with only a little more than a third of the building pre-leased.

"That's a lot of spec (built on speculation) space for Winnipeg, but I think it will do well," he said. "It's a great project."

For a lot of the same reasons McGarry cited, Rocan also thinks other distribution-centre projects could soon follow, including others by bcIMC.

"I think if everything works out the way it looks like it will... I think it's just going to drive a lot more business in this direction," he said.

He said there is a growing demand for new-generation distribution buildings in Winnipeg that have higher ceiling heights and more space between support columns.

And that has bcIMC officials taking a long, hard look at doing more of these kinds of projects here.

"Again, there has to be a strong business case for it," Rocan added.

He said a number of factors prompted bcIMC to proceed with the Discovery Place project. They included the "robust" local economy, a limited number of industrial buildings with 28-foot (8.5-m) ceiling heights -- the new minimum standard in North America -- and the short supply of vacant industrial space in the city.

He said the vacancy rate within bcIMC's portfolio is even more acute -- 0.93 per cent -- and a number of its existing tenants are looking for more space.

"So we're very happy to be able to offer this product... " he added.

He said Inksbrook Industrial Park was a logical place to build the new facility because bcIMC had vacant land there and the northwest quadrant of the city has become known as a distribution hub for the city.

That is especially so with the planned development of Centre Port Canada's inland port on land to the west and north of Richardson International Airport.


Know of any newsworthy or interesting trends or developments in the local office, retail, or industrial real estate sectors? Let real estate reporter Murray McNeill know at the email address below, or at 204-697-7254.


Facts about

Discovery Place

HERE are some of the notable features of bcIMC's new Discovery Place distribution centre under construction in Inksbrook Industrial Park:


-- 152,000 square feet in size


-- a 28-foot (8.5-m) ceiling height


-- a 20.3-centimetre-thick concrete floor, instead of the usual 15.2 cm, so the floor can bear more weight


-- 15.2 m between support columns, making it easier to stack and retrieve goods -- a building depth of 60.9 m, instead of the 45.7 m found in many of the industrial buildings built during the 1990s and early 2000s.


-- source: Bentall Kennedy



Republished from the Winnipeg Free Press print edition November 5, 2012 B4

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