Power centres running out of room

April 7, 2008
Winnipeg Free Press
Written by: Murray McNeill

McGillivray, Kenaston popular area to be located

They're running out of room at Winnipeg's fastest growing retail shopping node.

In the space of nine short years, the Kenaston and McGillivray area of southwest Winnipeg has been transformed from a collection of farmers' fields into one of the city's biggest retail nodes, with about 1.2 million square feet of developed space in the three power centres that have sprung up around the intersection.

However, real estate industry officials predict development could come to a screeching halt next year -- not because the area is falling out of favour with retailers, but because it's running out of room for them.

"I think by the end of next year, there will be no commercial space available in the Kenaston and McGillivray area," Michael Nozick, president of Fairweather Properties Inc., said in an interview.

And most of the land to the south of the Kenaston and McGillivray node has already been taken for other uses, said Ken Yee, senior executive vice-president of the Winnipeg office of Cushman & Wakefield LePage. So once Kenaston and McGillivray is full, that will pretty well be it for the area.

Fairweather is the developer for the Linden Ridge Shopping Centre on the southeast corner of the intersection. Nozick said he couldn't comment on how much space is still for sale or lease in the approximately 450,000-square-foot Linden Ridge development. But he did say he expects it all to be gone before the end of next year.

The largest of the three power centres -- the 565,000-square-foot Kenaston SmartPark on the northeast corner -- has already been fully leased for some time. And the other one -- the 450,000-square-foot Kenaston Common on the northwest corner -- should be fully leased by the end of this year, representatives for its leasing agent -- Cushman & Wakefield LePage -- said in an interview.

That's about a year sooner than was originally forecast, but industry officials say they aren't surprised.

"It's a hot area," Joy Halliday, a Realtor with Cushman & Wakefield's retail services division, said in an interview. "It's where the momentum is right now and there are a lot of people who want to be there."

Nozick noted southwest Winnipeg has been the fastest-growing area of the city in recent years, and new retail development was needed to service all the new residents. And last year's launch of the massive Waverley West residential development, which could add up to 11,000 new homes, apartments and condominiums to the area over the next 20 years, has added fuel to the fire.

"So they (retailers) are getting in while the getting is good," Nozick said.

Kenaston and McGillivray already features a who's who of Canadian big-box retailers. And clustered around them are dozens of smaller retailers ranging from restaurants to clothing stores.

There will be about 1.5 million square feet of retail space in the Kenaston and McGillivray node once it's fully developed. That will put it in the same league as the city's other top retail shopping nodes, which include Polo Park, St. Vital, Regent and Lagimodiere, Garden City and the former Unicity Shopping Centre on Portage Avenue West.

Michael Stronger, a retail specialist with Winnipeg real estate firm, Shindico, said there may not be a need for more retail development.

"The combination of Kenaston and McGillivray and Pembina Highway should be enough to service Waverley West for a few years," Stronger said. "It's going to take a few years for that (Waverley West) to reach a critical mass."

Yee said leasing activity in Kenaston Common really took off after Costco opened a store in the power centre last November. "We started getting calls from prospective tenants who just wanted to be there because Costco was there. It changed the whole complexion of the development."

Halliday said there is only about 90,000 square feet of space left to lease in the power centre, and 60,000 of that will likely be taken by the end of next month.

She said seven more retail outlets are scheduled to open over the next couple of months, including a new Joey's Restaurant. It's expected to open early next month, and will be the Vancouver chain's second Winnipeg outlet. Area manager Mark Treen said the new one won't look anything like Joey's 18-month-old Polo Park outlet.

"We don't want to be a cookie-cutter restaurant chain where every one is the same," he said, noting it will be a little bigger (6,200 square feet) and will feature a walk-in wine cooler in the dining room and a horseshoe-shaped bar in the lounge. The kitchen area also will be elevated and open to view from both rooms, which will each have a seating capacity of about 95 people.

"People always wonder what's going on behind that (kitchen ) wall," Treen said. "And we're so confident in our chefs and how they prepare the food... that we want to show them off to our customers."

Treen said the fact there are already a whack of other restaurants in the area, including The Keg, Moxy's, Kelsey's and Boston Pizza, will be a bonus because they help draw consumers.

Know of any newsworthy or interesting trends or developments in the local office, retail, or industrial real estate sectors? Let real estate reporter Murray McNeill know at the e-mail address below, or at 697-7254.

murray.mcneill@freepress.mb.ca

What's in store

Here are some of the big-box retailers in the three power centres in the Kenaston and McGillivray shopping node:

• Wal-Mart
• Costco
• Canadian Tire
• Home Depot
• Rona Home and Garden
• Canada Safeway
• Sobeys

Here are some other stores coming to the Kenaston Common power centre over the next few months:

• Joey's (a Vancouver-based restaurant chain that also has an outlet at Polo Park).
• Marble Slab (a high-end ice cream retailer. New to the city).
• Clay Oven (a locally owned East Indian restaurant chain, which also has an outlet on Inkster Boulevard).
• Hynotic Spa and Salon (a U.S.-based spa and salon chain).
• Popeye's Supplements (a national retailer that specializes in sport nutrition supplements and has two other outlets, on Nairn Avenue and St. James Street).
• The UPS Store (11 other outlets in Winnipeg).
• Stitch City Tailor (Winnipeg-based tailor shop with one other outlet on McPhillips Street).

Also coming:

• Indigo Books and Music (Canada's largest book retailer. Expected to open in September).
• Golf Town (a golf supplies store with one other outlet on Empress Street. Expected to open in spring, 2009).

-- Source: Cushman Wakefield LePage

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