Winnipeg’s industrial market shows strong fundamentals despite increased vacancies in the last two quarters.

According to Colliers’ Mid-Year Industrial Market Report, Winnipeg’s industrial market vacancy rate rose 0.5 per cent in the second quarter of 2013, reaching 3.45 per cent. The industrial market saw 140,000 square feet of supply added to its inventory in the first half of 2013, and experienced -247,332 square feet of negative absorption.

The rise was in part because of the listing of 1750 Inkster Blvd., which brought 200,000 square feet of inventory onto the market earlier this year. This property hit the market due to the failure of a U.S.-based tenant company, and now represents a significant portion of the industrial space available for lease.

Despite the rise in vacancies, quality industrial space in all areas of the city continues to be absorbed quickly when it hits the market. While functionally obsolete spaces that do not meet current needs of industrial users continue to languish, the Colliers’ report predicts landlords will be motivated to invest in upgrades in order to compete with modern buildings commanding higher rental rates.