Downtown Winnipeg seeing rising office vacancy, suburban rates going up

All throughout Canada, the latest numbers on office space rentals highlight a growing shift in how businesses and people are envisioning the future of the office.

The data, gathered by CBRE Limited, takes a look at how much office space is being used and rented out compared to how much is available or vacant. Across the country as a whole, nearly 20 per cent of office space is vacant. In Calgary, that number is close to 28 per cent, while Winnipeg is seeing a vacancy rate of 16.2 per cent.

The report also notes that despite a rise in the national vacancy rate, the outlook seems to be improving for suburban areas. In Winnipeg alone, suburban vacancy is down to 10.9 per cent — lower than the third quarter results last year of around 12 per cent.

Paul Kornelsen, CBRE’s vice-president and managing director in Winnipeg, said that for the last two years the city’s suburban outlook has been positive. Even with the current vacancy rate, which he attributed to timing, office spaces in the suburbs have been performing well.

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“We’re in a period where the entire market is resetting and reprioritizing what’s important in office space,” said Kornelsen. “The numbers don’t always tell the whole story… yes, we are in sort of unprecedented times but in terms of the vacancy rates, it’s not totally dire. There are positives happening.”

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One of the positives of influx suburban office spaces, Kornelsen noted, is that more people are heading to work in the suburbs instead of commuting downtown. This translates to lower commute times for community and a cut back on parking costs. All of this reflecting a company’s push to reimagine or rework the space an employee spends time working in, he said.

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Yet, while such reimagining may bring out benefits for a company, it can impact the economy as well if more offices decide to move out of the downtown core and into the homes or suburban neighbourhoods.

“Every single small restaurant that is located downtown is significantly impacted where there are less people working downtown. In that regard, it certain does impact a certain sector of the economy,” said Kornelsen.

The director added that amid such changes and the challenges that it can bring, the city of Winnipeg is “well-positioned” to handle them. This, he said, is owing to the city’s well diversified economy and stability in tough periods.

As a whole, Kornelsen said that the numbers don’t reflect an entire story. And that even if they might seem high, they are a product of a climate of change.

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“It’s not the death of office space,” he said.

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