“It shocked even us,” says Martin McGarry from DTZ Barnicke, about how fast industrial land is selling in the sprawling development called CentrePort in Winnipeg’s northwest quadrant.
DTZ Barnicke is now preparing 100 new acres of prime industrial land in Phase Three of its Brookside Industrial Park West within the CentrePort footprint.
Earlier this month, sales closed on Phase Two. More than 55 acres sold in less than two years – an astounding rate in the Winnipeg market which historically grows very slowly.
“I don’t see demand ending anytime soon,” says McGarry, president of DTZ Barnicke Winnipeg,
Brookside Industrial Park West is one of two parks under active development at CentrePort. The other – Brookside Business Park, marketed by CB Richard Ellis – has 60 acres sold to 16 companies.
Two factors make these parks hot sellers. Firstly, Winnipeg has a dearth of shovel-ready, industrial land.
“The inventory is unbelievable depleted,” says McGarry. “Frustrated buyers, developers and everybody else can’t find decent, quality space to occupy in the existing marketplace.”
Secondly, CentrePort is a value-added location.
“If you are going to build new or develop a facility,” says McGarry, “why wouldn’t you want to be in CentrePort? There are a million reasons why it is going to be successful.”
CentrePort is a 20,000 acre inland port; the northern gateway to the Mid-Continent Trade Corridor linking Canada, the US and Mexico.
The only inland port in Canada, CentrePort offers direct access to road, rail and air transportation and is the first with single-window access to Foreign Trade Zone (FTZ) benefits.
Under the FTZ, companies reap immediate cash-flow benefits: trade barriers are reduced or eliminated; duties are waived up-front or rebated later; federal and provincial sales tax is relieved; paperwork is streamlined.
McGarry believes CentrePort is an ideal fit for international manufacturing and assembly.
“If you are assembling cars and bringing in parts from all over the world, you would certainly want to be in a Foreign Trade Zone. And our access to the US market through the North American trade Corridor is of immense benefit.”
Planes, Trains and Trucking Routes
Enormous upgrading is underway to the air, rail and road infrastructure linking CentrePort with the rest of the continent.
A $212-million four-lane expressway slicing through the CentrePort property will enhance connections with the James A. Richardson Airport and the CP Weston rail intermodal facility. ‘CentrePort Canada Way’ is scheduled to open in 2014.
Adjacent to the airport, three thousand acres are being developed as an “airport campus” within CentrePort.
Land has also been earmarked for a common-use rail facility.
CentrePort is working with each of the rail carriers operating in Winnipeg – CN, CP and BNSF – to develop the facility, unique in North America as industrial parks are typically served by only one railway.
The trucking industry has been active in Phase One and Two of the industrial park developments. Razir Transport, Meyer Bros. Trucking and Searcy Trucking Ltd all purchased land.
Rosedale Transport, an Ontario-based trucking company, officially opened a new 40,000 square foot facility in October 2011 which is a hub for western Canadian distribution.
“This location made great sense for us, both in terms of cost effectiveness and strategic location,” said Chris Lerm, Rosedale’s regional manager.
McGarry expects transport companies to figure prominently in his Phase Three but also believes that developers will get involved.
“We’re dying for new space,” he says, “So if you are a developer looking to build new, multi-tenant industrial warehouse space, we think that’s one of the best places to be.”
Full Speed Ahead
Land sales within the two parks are well ahead of forecasts in Centerport’s business plan. Absorption is twice the city’s average rate for new industrial land.
More than 130 businesses now operate at CentrePort, with construction underway on several new tenants’ buildings.
“The cost of construction of new buildings in Manitoba is very expensive,” says McGarry, “because of a lack of labour and a host of other issues. Hopefully the reasonable price of our land will offset that.”
McGarry expects Phase Three lots – the first full-serviced land offered for sale within CentrePort – to average $250,000/acre.
It was only last summer that the Rural Municipality (RM) of Rosser, where much of CentrePort’s land is located, and the city of Winnipeg agreed on cost-sharing for water and waste servicing.
That $17-million dollar agreement is critical in opening up the development to larger tenants and bigger development.
“Keep your eye on CentrePort Winnipeg,” says McGarry. “I think it will be within two years that we see sizeable manufacturers start to locate here.”
Phase Three marketing should begin this fall with delivery of titles by early 2013.