Winnipeg Outlook 2024

January 15, 2024 4 Minute Read

Winnipeg skyline for Outlook 2024

2024 | Real Estate Outlook Series

The past year was tough on Winnipeg’s downtown office market, which ended 2023 with 18.3% vacancy, a record high for the Manitoba capital. The suburban office market fared slightly better, with vacancy dropping more than 100 bps to 10.9%.

Like in other Canadian cities, Winnipeg’s industrial availability rate ticked up in 2023, hitting 2.5% in the fourth quarter. This came amid the delivery of 568,188 sq. ft. of new industrial supply, with 297,198 sq. ft. currently under construction.

What does 2024 hold in store for Winnipeg real estate? We spoke to CBRE Winnipeg Managing Director Paul Kornelsen to find out what he’s watching for.


The state of the office market is not great, but it’s not dire either. We’re at historically high vacancy downtown, and that doesn’t include the new Wawanesa Tower. I can look over out my office window and see they’ve got the sign on the building already, and taking possession soon. That will impact our market, though we’ve been anticipating its arrival for a couple of years.

One of the buildings Wawanesa was in, 200 Main, has been sold to the Manitoba Métis Federation. That’s a good news story, that we’re not bringing three empty buildings to the market. One or both of the other buildings Wawanesa was in – 191 Broadway and 333 Main – could potentially be candidates for a conversion of some sort.

That’s something I’ll have my eye on this year: conversions. It’s not the magic pill that makes all the problems go away, but how the city tackles implementation will be interesting. We currently have 1.7 million sq. ft. of vacant space that theoretically could be eligible for conversion. Winnipeg’s office marketplace is never going to backfill that amount of space in the next 20 years. So how we move real estate from the office designation to something else will be a part of making a healthier downtown.

Our suburban office market was incredibly strong, though we’ve had a couple of larger pockets of space that have come back, particularly in the southwest, which had been the strongest performing quadrant in the city. I’ll be keeping an eye on demand in that area. Is the additional vacancy in suburban office a simple matter of timing and tenants needing different space, or is it a sign of something else?

If sellers can adjust their expectations, that would serve the multifamily market. Right now expectations are not in line with reality. - Paul Kornelsen


The market is so tight it’s unhealthy. There’s nowhere for anybody to move and there are incredible pressures on rental rates. Can tenants pay close to $20 per square foot for industrial space? Probably not.

So when will new supply be coming on? There are encouraging signs: Hopewell just finished a building; QuadReal’s got a building too – that’s all Class A product with 36-foot clear ceilings, which incumbent Winnipeg tenants likely won’t be moving into.

Who will be the big out-of-market mover that comes to Winnipeg? CBRE is front and centre on a lot of those conversations, with our national platform and the mandate we carry. What will be the first domino that moves in the industrial market that gives more oxygen to the market and starts the ecosystem humming again? That’s the main thing to watch in 2024.

At CentrePort the main action was Fastfrate Group being the first to buy a parcel and start development in the Rail Park, which is exciting news. And we’ll start to see more sales and more momentum. But the big issue we’re facing is cost of construction. I don’t foresee a boom because of construction pricing. If it can be brought to more manageable targets we would see that boom.

We’re currently held captive by a tight market and high construction prices, and land has continued to hold its value. Unless land prices start dropping people won’t be able to take advantage of the opportunities. So again, something has to give to free up the industrial market. There is so much pent up demand for it.


It continues to be a pretty stable market. We haven’t seen cap rate compression. And much like the industrial market it’s very tight on supply; we’re seeing a lot of deals done pre-market and off-market. There’s a lot of demand locally and nationally to enter Winnipeg as a multifamily holder. We need the housing starts and they’re not being produced fast enough, like everywhere else in the country. Multifamily is a strong asset class and it needs more supply.

Pricing expectations is the other thing. I was on a panel and we had a lender on it who made the comment that valuations for people who currently own multifamily are not what you can sell it for today. That’s because of interest rates. Generally these are investment holdings and when you look at your cash return with increased interest payments each month you see it isn’t making you money. if you want to buy at the price it needs to be, the debt price has to be lower.

So pricing expectations is a big thing right now by people who hold multifamily. Rather than admit that the  building is worth this under current interest rates and cap rates, they’d rather just hold it and continue to take the cash. That’s limiting supply and limiting a lot of people who probably would have put their building up on the market. They’re holding it because it’s not worth what they think it’s worth. But in reality those buildings have just lost value. And we’re not going back to the 0.7% interest rates again.

If potentially sellers can adjust their expectations, that would serve the multifamily market, especially here in Winnipeg with the amount of supply. Right now expectations are not in line with reality.

Sometimes your hand gets forced, so there will be some people who won’t be in a position to wait it out, and there will be some more distressed sales. We haven’t seen much and I don’t anticipate it. Winnipeg is a unique position. We’re not overly leveraged and our economy is diverse, and we tend to outperform other small markets in non-boom times. But it’s inevitable some will be exposed to distressed sales in 2024. The question is how big of an impact that will be in our market.


Retail is doing really well. It has surpassed everyone’s expectations and is performing strongly. To be in a prime retail node in the city is difficult, just in terms of supply of available space. A number of new retail projects are coming in 2024. Hopewell has Refinery District; Whiteland has Polaris Place; LS Properties is nearing completion on an expansion at Kildonan Crossing; and Qualico is doing the next phase of Sage Creek.

Generally Winnipeg has been a build it first and they will come kind of market. So we’ll see if we can live up to that billing as this product gets delivered and how fast it will be absorbed. But overall things are looking pretty good for retail.

Winnipeg is due for better things ahead. I’ll be interested to see how things play out in 2024 – it will no doubt be another year of challenges but also great opportunities for those with vision.

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