The industrial development renaissance in Winnipeg is continuing at a blistering pace with another 17-acre, 200,000-square-foot-plus development underway.
Martin McGarry’s local private equity firm MMI Asset Management Ltd. is already working on the first of what will be three buildings likely in three years with a total capital investment of about $46 million.
Located immediately west of Crystal Properties’ Brookside Industrial Park (that 90-acre site sold out in less than a year a couple of years ago), MMI plans to build two 80,000-square-foot and one 60,000-square-foot single-storey buildings with 28-foot clearance.
Called Steele Business Park after Maurice Steele, the veteran major land owner in the area who sold the land to MMI and is an investor in the enterprise, it is located on the south side of CentrePort Canada Way.
McGarry, who is also president of Cushman & Wakefield/Stevenson, said he fell in love with the property a couple of years ago.
"In my opinion it is the best parcel of land in the area," McGarry said.
The land is zoned but not serviced. MMI will subdivide it and has started work on laying sewer and water lines.
McGarry is building on speculation, that is, he has no tenants lined up.
But he may have a better idea than anyone as to the demand that currently exists.
It’s been documented for some time that the city suffers from a dearth of new industrial properties and McGarry has been at the heart of efforts to rectify that situation, especially in the northwest part of the city in the CentrePort footprint.
"We have six full-time industrial brokers on the Cushman side, which is arguably one of the largest industrial brokerage firms in the city," he said. "We have a comfort level and we know of tenants who might identify with this development but we have not signed anyone yet."
The presence of heavy equipment on that project will become a regular feature of that part of CentrePort.
Over the past few years more than 500 acres of previously empty land has been developed into dozens of new industrial buildings in about a half dozen separate industrial park developments.
And McGarry is confident that supply of new industrial properties in the Winnipeg capital region has not nearly kept up with demand.
"Remember, Winnipeg has such an old inventory of industrial properties and we never really overbuild in Winnipeg," he said.
In addition to the lack of inventory, the warehousing and distribution business generally is starting to shift from mega-distribution centres to a more regionalized approach.
The recent announcement that Amazon is leasing a 113,000-square-foot space in north Winnipeg is one indication of that trend.
Diane Gray, the CEO of CentrePort, said, "I would say most companies are moving away from the large national distribution centres where they pick one or two major cities and that is how they service the entire country. Now they are moving into regional networks of distribution activity."
That was happening before the pandemic and many believe there will be more of that type of activity post-COVID.
And McGarry believes that Winnipeg will be a beneficiary of that trend.
"Winnipeg has been a fly-over market for some time even though developers knew about the transportation assets the city offers for the distribution sector like the three Class I railroads and the 24/7 airport," he said. "Now with de-centralization of warehousing and the risks due to the pandemic, more of the big users are recognizing they need to be closer to the delivery points."
Gray said, "The industrial real estate activity that we are seeing today is a result of years of hard work and collaboration amongst many players to create an environment at CentrePort that is conducive to investment."
The concentration of development in the area, including the National Research Council’s $60-million, 72,000-square-foot advanced manufacturing research facility, is becoming a significant economic development zone.
Ralph Eichler, Manitoba minister of economic development training, said, "As we continue to navigate this pandemic… it has become clear the best economic support is employment."
And he said developments like MMI’s Steele Business Park "will no doubt create hundreds of jobs."
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.