Downtown Winnipeg developments bring opportunities to rental market
Residents seek 'experience that you just can't get anywhere else in a city,' says property manager
New developments taking shape in downtown Winnipeg are creating opportunities for apartment developers and managers wanting to bring more residents to the city core.
Several major projects are in the works, from True North Square, a $400-million mixed-use development currently under construction near the MTS Centre, to a $165-million 40-storey skyscraper being planned at 300 Main St., along with various initiatives to bring more Winnipeggers downtown to work, live and play.
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Alongside that development is the construction of new rental buildings, along with the redevelopment of older buildings into apartments, downtown and in the Exchange District.
"People are looking for convenience, access to transportation, shopping, hospitality, obviously education with Red River College having a campus in the Exchange," said Adrian Schultz, president and CEO of Imperial Properties.
"But I think mostly they're looking for a certain feeling and perhaps vibe and experience that you just can't get anywhere else in a city other than in the downtown part, especially in a historic area like the Exchange District."
A report released last fall by the Institute of Urban Studies at the University of Winnipeg pegs the downtown population at over 16,400, which is up from 9,000 not long ago.
Meanwhile, the Canada Mortgage and Housing Corp.'s latest rental market numbers have Winnipeg's rental vacancy rate at 2.9 per cent as of 2015, which is up from 0.9 per cent in 2010.
In parts of the city that include downtown, the vacancy rate is also around three per cent.
The CMHC attributes the higher vacancy rate over the years to more apartment units. The number of rental units in the city grew by 2.6 per cent between 2014 and 2015, adding 1,400 more units into the local market.
"I believe it's a healthy market for the province. It's got a little bit more vacancy than what landlords would like to see," said Avrom Charach, who speaks for the Professional Property Managers Association of Manitoba.
"Three or four years ago, the rental market downtown was higher than the average vacancy rate, which at the time was close to one per cent and the downtown market was closer to two or three per cent still. Now it's on average and filling up, but the thing is in the last four years there's been new construction, so there's new units, and it's still not above average. So it's getting better; there's a lower vacancy rate there."
Will downtown be saturated?
Whether the rental market downtown will end up having way more supply than demand with developments like 300 Main and True North Square, both of which will include residential units, remains to be seen, Charach said.
"The downtown market is now getting to be the same as the rest of the city. Will we saturate and end up with a five per cent vacancy rate? I'm not sure," he said.
"I know that condominiums, they were building them like wildfire in the last decade, and that's part of the reason why there's less people living in apartments … but I do hear condominiums are getting harder to fill but apartments are not getting harder to fill."
Schultz said while he believes the rental market won't necessarily be flooded, he added that managers will have to market and maintain downtown apartments more than in the past, when vacancy rates were low.
"I think there's lots of room for growth, but we will also see the real estate management market changing and evolving as the skill sets and our skill requirements change just due to all the extra inventory," he said.
"So as a consumer, you will start getting to enjoy perhaps a more evolved and improved resident experience than what you might have experienced even 10 or 20 years ago."
As well, he said more amenities for residents, such as grocery stores, are needed for the city core to continue growing.