Skip to content

Weekly Buzz: Surrey’s growth, foreign investment and Alberta industrial

Western Investor's media content roundup for the week of July 3 to July 7, 2017, featuring top stories on Western Canada’s commercial real estate market


Our top stories this week take us from West Vancouver, to Surrey, to Lethbridge, covering everything from Chinese investment to the industrial market. A potential land sale in West Van may lead to more green space in the Lower Mainland, while Surrey bid to attract investors may have the city racing along to become B.C.’s new business hub. Over in Alberta, the industrial market continues to paint a picture of opposites, as Lethbridge’s industrial market pulls ahead of major city Alberta. Finally, Chinese investment in 2016 was up over 2015, despite foreign buyer taxation implemented in August 2016.

Here is Western Investor’s pick of the most buzz-worthy stories published this week.


Canada among top four destinations for Chinese buyers – Times Colonist

A major Chinese real estate website has named Canada as one of four top investment destinations, behind U.S., Australia and Hong Kong. Property investments by Chinese buyers abroad also grew 25 per cent in 2016 over 2015, to a total of US$100 billion. So what does this mean for investment in 2017? Times Colonist has the story.

The Juwai report comes as new data released by the B.C. provincial government shows the total value of property transactions involving foreign buyers in May accounted for 3.1 per cent of the total in Metro Vancouver, and six per cent across B.C.

Meanwhile in Ontario the provincial government said Tuesday that between April 24 and May 26, 4.9 per cent of homes sold in the so-called Golden Horseshoe region were to foreign buyers.

Local critics and some in the real estate industry say keeping track of the number of foreign buyers like this doesn’t allow for understanding the amount of overseas money flowing into Canadian markets because purchases are being made with offshore trusts, shell companies and the use on land titles of proxy names to obscure the identity of beneficiary owners.

In particular, they cite a 2016 Transparency International study that says 50 per cent of the 100 most expensive properties in the City of Vancouver are held by such means.

Others such as Sotheby’s International Realty Canada CEO Brad Henderson say that Juwai’s estimate of Chinese buyers spending “$100 billion all over the world, helps to put (their spending) into perspective.”

It’s a milestone to break through the $100 billion mark, but this figure isn’t significant compared to overall Canadian real estate sales, said Henderson. “It is only a very small portion,” he said.

Juwai said that by analyzing what information its users seek, it expects “2017 to be another near-record year for Chinese outbound property investment, although flows will likely be lower than in 2016.”

For example, in the first quarter of 2017, Juwai users made fewer inquiries than in the first quarter of 2016, but “almost an identical number of inquiries as in the first quarter of 2015, a year which set a peak only surpassed by last year.”

“Despite its torrid pace of overseas acquisitions in the last decade, China has been buying for such a short period of time that its investors have only accumulated a relatively small stock of overseas property and other foreign assets,” said the Juwai report.

[Times Colonist]


Lethbridge industrial market accelerates – Western Investor

Lethbridge continues to be Alberta’s economic hotspot, and the city’s industrial market is no exception.

Industrial lease rates in Lethbridge have pulled even with Calgary as tenant takeup goes in different directions in the two Alberta centres.

The average industrial lease rate in Lethbridge ascended to $8 per square foot in the first quarter, while it declined to the same level as in Alberta’s biggest city.

Lethbridge also saw the absorption rate (lease and sale of industrial space) reach 50,000 square feet, while Calgary experienced negative absorption of nearly 1.8 million square feet in Q1.

The Calgary industrial vacancy rate has spiked to 8.5 per cent, up from 5.8 per cent one year ago.

In Lethbridge, industrial vacancies are at 6.2 per cent, up from 3 per cent in the first quarter of last year.

Avison Young, which provided these numbers, is more bullish on Lethbridge than on Calgary. “With optimism running high, Lethbridge’s industrial market should continue to accelerate throughout 2017,” the agency notes.

Calgary not so much.

“Calgary’s current forecast is for [industrial] vacancy to remain flat through 2017 and start tightening in 2018 as business confidence improves,” Avison Young stated.

[Western Investor]


Surrey woos companies with pro-business formula – Business in Vancouver

Surrey is making a conscious effort to pull ahead of Vancouver when it comes to growth and economic innovation. The city is upping its reputation as a “pro-business” jurisdiction by offering tech companies and other businesses more affordable commercial rents and fast-tracking the building permit application process. BIV takes a look at how Surrey can become the Lower Mainland’s next big metropolitan centre.  

The City of Surrey’s economic strategy for 2017-27, titled Building the Next Metropolitan Centre, lays out ambitious goals. The city hopes to create 36,200 new jobs by 2025, at an annual growth rate of 8%, through a set of sectors  like manufacturing, clean technology, health technology, agri-innovation and the creative arts.

Perhaps the biggest advantage the city enjoys is its ability to lure companies with cheaper commercial rent, smaller leasing costs and lower land prices, plus reduced red tape compared with Vancouver. Building permits from the City of Vancouver can take six to eight months due to a backlog at city hall, while average wait times in Surrey are around four to six weeks, according to a report from the Fraser Institute free-market think tank.

Companies that have recently opened offices or headquarters in Surrey include: financial software firm Finad; Switzerland-based Temenos; Ireland’s Medtronic (NYSE:MDT); California’s Skydance Media; Japanese electronic music manufacturer Roland; PwC (TSX:PWC); Coast Capital Savings; Westminster Savings; and Vancity.

Donna Jones, general manager for investment and intergovernmental relations for the City of Surrey, said the city has tenaciously lured investment over the past decade. According to its economic strategy report, it added more than 19 million square feet of commercial and industrial space (totalling $13.7 billion worth of construction) over the last 10 years and more than 3,000 new businesses in 2016 alone. Also, at any given time, there are about 1,000 job openings in the city of Surrey.

“What sets us apart from the others is there is truly an entrepreneurial mindset here,” Jones said. “I think it was born out of having to do more with less, maybe being somewhat of an underdog city for a number of years, and that has caused us to be very nimble in our processes.”

Though she said Surrey “has a different value proposition than Vancouver,” acknowledging that lower real estate prices play a big part, Jones added the city might not hit its targets for continuing economic growth if it doesn’t build light-rail transit.

Surrey economic development manager Stephen Wu pointed to inventory of available land as an advantage. According to its economic strategy, Surrey has 38% of the Lower Mainland’s available industrial land base, and the city aims to complete $16.8 billion worth of building development projects over the next decade while also investing $40 million into public amenities and parks.

“That’s a significant advantage we have as an emerging city compared to a lot of those traditional cities,” Wu said. “We can use that land to develop a metropolitan centre of the future.”

[Business in Vancouver]


West Vancouver seeks sale of donated land to fund Ambleside expansion – Western Investor

West Van is applying to sell off donated land left to the city by the Brissenden family – not to build more housing, but, shockingly, to increase greenspace. The story was originally posted by WI sister publication, North Shore News.  

The District of West Vancouver is looking to sell off 2.4 acres of land that was donated on the promise it would become a park in order to fund the expansion of Ambleside waterfront public lands.

District lawyers are preparing an application to the B.C. Supreme Court to alter the trust under which Pearly and Noreen Brissenden bequeathed their home at 2519 and 2539 Rosebery Ave. more than 25 years ago.

But the Upper Dundarave land just below Highway 1 was never dedicated as or developed into a park. The land is very steep, and it has no parking, access to transit or amenities, according to district staff, making it unsuitable for any future park use. The Brissendens’ home, an early example of Modernism from 1947, is still on the land and is rented out by the district.

Initially, staff had proposed selling the entire property but the plan now going before the courts would see the northern half of the land retained and dedicated as park with new trails to be built. The southern half would be sold for redevelopment, and the proceeds would go towards the purchase of the last two privately held residential lots on Argyle Avenue (1444 and 1448 Argyle Ave.), part of council’s long-term plans for the Ambleside waterfront vision. Staff estimated those two lots are worth about $10 million together. A survey by the district found 58 per cent of respondents favoured selling or leasing the Brissenden land to fund their purchase.

If the sale goes through, a plaque honouring the Brissendens would be placed near the trailhead on their former property and the stretch of waterfront purchased would be renamed Brissenden Waterfront Park, with its own dedication plaque.

Council approved the plan by a vote of 5-1 on June 19 but not before wrestling with the ethical question of asking the courts to amend the trust.

“Not all council decisions are black and white. There is a lot of grey in the world. This is certainly one of them,” said Mayor Mike Smith. “We all respect the generous donation of the Brissendens and we want to honour that in every way but the reality of the situation is we’ve got a piece of land that for 25 years, we haven’t even collected any taxes off it. It’s done nobody any good and it’s almost disrespectful to the Brissendens to leave the current situation in place.”

Coun. Craig Cameron also acknowledged the “solemn promise” a trust represents, but he said council has an obligation to act in the best interests of the community as a whole.

[Western Investor]