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Victoria real estate boom shifts from residential to commercial

New home construction in Victoria has helped rev up the office and retail and bring dormant developments back to life

Commercial real estate is the new focus in Victoria as a record home-building pace spreads into the office and retail sector. Meanwhile, a prime Colwood development site is in play and a historic hotel will test the demand in a roaring tourist industry.

Victoria set a near-record home-building pace in 2016, expected to nudge 3,000 housing starts, eclipsing the 2,739 starts one year earlier.

“We have passed our peak year in over a decade and we will be seeing stronger starts than we’ve had in several decades,” said Casey Edge, executive director of the Victoria Residential Builders Association.

“Victoria has been climbing out of a significant downturn since 2009, and it’s only in the last year and a half that we have been able to see reasonable numbers,” Edge said. Edge did note there is some concern that 80 per cent of all new home are being built in just three municipalities — Langford, Victoria and Saanich.

Commercial real estate could be the bigger news for 2017, however, with dormant sites springing to life.

Among these is Dockside Green, an ambitious mixed-use development that has been stalled for seven years.

In 2005, the city chose Vancity Enterprises along with Windmill Development to turn the former city-owned brownfield in Vic West into a sustainable showcase featuring 1,000 housing units, along with commercial and light industrial uses. The project stopped in 2010 with just 22 per cent of the site built out. 

Now Dockside Green is seeking to reinvigorate the 15-acre development. The new master plan calls for a mixed-use community of commercial and residential buildings and a retail centre between the Point Ellice Bridge at Bay Street and the Johnson Street Bridge. 

If the new master agreement is approved by Victoria, Vancity credit union will invite third-party developers to build their own projects on individual lots.

In Sidney, developer Omicron will break ground this spring on the $35 million Gateway shopping centre. 

The centre is on Victoria International Airport land on Beacon Avenue and Patricia Bay Highway and recently received approval from Sidney council. 

In Saanich, the developer who wants to turn an old racetrack into the Sandown Commons commercial centre has been a given a one-year extension to pry 12 acres of the 95-acre agricultural parcel for retail development. Platform Properties has until November 14, 2017, to meet the Agricultural Land Commission requirements for a reclamation for the part of the property that will remain in the Agricultural Land Reserve, said Curt Kingsley, North Saanich’s director of corporate services.

In Colwood one of the largest land parcels in the Capital Region is in play. The Department of National Defence (DND) is preparing to sell its 536-acre Royal Roads property, which currently houses Royal Roads University (RRU).

The DND is “considering various options for its disposal,” said DND public affairs officer Jessica Lamirande. RRU has 83 years remaining on its 99-year lease with DND.

There are rumours that a deal may already be in the works to sell the site to the Songhees and Esquimalt First Nations. 

Songhees Chief Ron Sam said if an agreement is reached, it could mark the end of a 24-year treaty negotiation. “We’re not after Royal Roads University; we’re looking at the lands surrounding the university. My understanding is there’s about 500-plus acres of land at Royal Roads and that’s really what the Songhees Nation is looking at,” he said.

In downtown Victoria, the first new office buildings in years are under construction and slated for completion of a total of 500,000 square feet in 2018. According to Colliers International, the downtown office vacancy rate recently dipped below 7 per cent for the first time in years.

The hotel market in Victoria has set record levels for revenue per available room – $120– in the past year and an historic hotel connected to the landmark Craigdarroch Castle will test the investment market. The 1913-era, 15-suite Craigmyle hotel has just been listed for $3.6 million by Newmark Knight Frank Devencore agent Randy Holt.