Vancouver developers are looking to the capital region to capitalize on the city’s high real estate demand and strong economy. Investment in the Victoria’s downtown has boomed over the past two decades and has even spilled over to resorts on the outskirts of the city. This week’s stories take a look at Victoria lucrative commercial market, with additional coverage on the retail and recreational sector across Western Canada.
Here is Western Investor’s pick of the top four real estate stories published this week.
The capital region has seen a steady stream of developments and buyers in the last ten or so years. Major Vancouver developers such an Onni, Bosa Properties and Concert Properties are currently pursuing projects in what’s considered a secure and predictable market facing a downtown resurgence, Times Colonist reports.
Concert’s aim is to “stay focused in urban cores where we have really witnessed over the last 10 or 12 years a resurgence in downtown lifestyle. People [are] willing to live closer to the core to avoid having cars and be closer to work and be closer to recreation. We’ve seen that in just about all of our projects.”
Concert also built the 66-unit Chelsea on Burdett Street, 365 Waterfront at the Selkirk Waterfront, and the 157-unit Era condominium on Yates Street. The company converted the Queen Victoria Hotel into a rental apartments. It won rezoning last month for its former Crystal Court Hotel property on Belleville Street that includes a 15-storey tower as part of a new seniors community with 131 rental units and 42 condos.
Concert is partners with Victoria’s Jawl Properties in the development of the six-acre, mixed-use Capital Park site next to the legislature. “It’s just such an exceptional opportunity and so rare to have a site of that size and scale,” McCauley said.
Vancouver’s Reliance Properties is working with heritage buildings in or near downtown.
“We focus on urban renewal and urban densification and that is what is happening in Victoria right now,” said president Jon Stovell. Victoria is “great walkable city, has a great vibe, has a great culture,” said Stovell. He added that another factor is Victoria’s official community plan, which sets out a “robust approach to growth and development.”
Reliance developed the 122-unit Janion Hotel, which brought micro-units to the city, on the north side of the Johnson Street Bridge.
The company is seeking a rezoning for its Northern Junk property, on the south side of the bridge, with two old brick warehouses. Stovell is hoping for approval, aiming to start marketing next year.
The Fairfield Block, the Board of Trade Building in Bastion Square and the Guild Building, all historic downtown properties, are among Victoria holdings in Reliance’s portfolio.
Continued growth on the lower Island is expected because of demographics, and Vancouver’s home prices, Stovell said.
Earlier this month Western Investor reported that owners of the Bear Mountain resort near Victoria have been considering selling the property or bringing in new investors or developers to revive the property. Now, Business in Vancouver has learned that Bear Mountain owners have enlisted Vancouver architect Arno Matisto for an ambitious tower development.
John Hardy Group Inc., an Atlanta, Georgia, development firm with a focus on the hospitality sector, will fly Matis and four other candidates to New York this fall to present at its Radical Innovation Award competition. Matis has proposed a series of concave towers for the high point at Bear Mountain that could offer 450,000 square feet in what he bills as a “vertical micro-climate resort (VMR) concept.”
“Architecture is inspired by the striking West Coast setting; dramatic cantilever decks that stagger and terrace like evergreen tree branches atop a rippled pond,” the project description says.
The towers use “reflective guardrail systems to redirect additional light down and naturally brighten resort grounds.”
Ecoasis Developments LLP recently engaged Jones Lang LaSalle to review options for Bear Mountain, which it acquired in 2013. However, work continues on the site on Players Drive for which Matis drafted the original plans in 2008.
“As part of our master planning, Ecoasis approached Arno last year to redesign the project at a lower density and incorporating sustainable attributes that would coexist with the Ecoasis 2020 environmental plan that is under development,” said Shannon Drew, vice-president, corporate affairs and community initiatives, for Ecoasis. “Scheduling to advance such a project has yet to be defined and would most certainly be driven by demand.”
For the first time in a decade, B.C. outsold the top-performing Prairie province, according to new Colliers International stats. Suburban malls are undergoing a period of reinvention, which is expected to further retail growth across Western Canada.
Canadian retail sales in 2016 out-performed projected growth by $15 billion, according to a new report by Colliers International, to the tune of $550 billion in sales national. Canada’s “Big 4” provinces – British Columbia, Alberta, Ontario and Quebec – account for 86 per cent of Canadian sales. Most notably, B.C. outsold Alberta for the first time this decade.
Retail sales in B.C. grew 7.2 per cent from the first quarter of 2016 to first quarter 2017. Sales in 2016 hit $76 billion, eclipsing Alberta’s $75 billion in retail transactions. Although Alberta sales dropped from 2015 to 2016, sales in the Q1 2017 have increased 7.2 per cent year-over year.
Saskatchewan’s 2017 sales are ramping up, seeing a 6 per cent sales growth this quarter over last year. Last year’s sales totaled $19 billion, growing 2.2 per cent over 2015.
Manitoba sales are experiencing significantly lower first quarter growth when compared to last year. Sales grew 7.3 per cent in 2016, and only 1.8 per cent in Q1 2017.
Colliers’ report notes that most suburban malls across Canada are undergoing major redevelopments, adding substantial retail square footage and incorporation residential towers.
“Regional shopping centres near major markets are particularly well-positioned for future development, occupying large sites of 50 to 100 acres in urban or suburban areas,” the report notes. “All it takes is a shake-up in tenancies, changes to the competitive landscape, new ownership or a regular review of the mall's strategic plan to set the wheels in motion.”
The residential sector has remained fairly resilient, despite a tough couple years for real estate in the Prairies following the oil recession. That resilience is never more present that in the Alberta recreational property market, where vacation homes have the highest average price of any other provincial recreation market.
The 2017 Royal LePage Canadian Recreational Housing Report notes the majority of major provincial markets are experiencing increases in year-over-year price and sales volume increases, lead by high prices in the Western Canada market. Tight supply and healthy demand of recreational housing may be positioning the Alberta residential market for a comeback.
“There is a transition happening,” said John Hripko, sales representative for Royal LePage Benchmark. “With the economy improving, and consumer confidence strengthening across the province, we expect to see an upswing in demand for discretionary purchases like recreational properties in the near term, which will ultimately put upward pressure on prices.”
Alberta’s aggregate price for recreation property – including lakefront, riverfront, oceanfront, island, woods cottage/cabin and resort/condo types – is $816,700 as of May 2017, as compared to the national price of $439,000.
“Unlike many other oil producing provinces, where home values have remained constrained, in part due to the impact of commodity prices, recreational properties near Calgary and Edmonton have held their value remarkably well in the face of the recent economic downturn, especially when compared to other market segments,” said Kevin Somers, chief operating officer of Royal LePage Real Estate Services Limited.
In contrast, the average price for a recreational property in Saskatchewan is $297,200.