A real estate development firm has capitalized on the high demand for industrial space in north Richmond by partnering with a Toronto-based investor to close a deal on a coveted property.
Vancouver-based developer PC Urban Properties, along with Toronto’s KingSett Capital, an institutional investor, recently purchased the Viking Way Business Centre.
article continues below
Trending Stories
The 9.7 acre site – a light industrial business park, on Viking Way near the Knight Street Bridge – is currently fully occupied, and PC Urban says redevelopment plans will be announced in the fall.
It’s the company’s largest acquisition to date, according to PC Urban’s CEO, Brent Sawchyn.
“It’s a well-positioned, well-known industrial property in a desired sub-market of Richmond, where there is currently less than one per cent vacancy,” he said, adding that the deal highlights a new trend in the industrial real estate market, where investors partner with local developers.
And according to Joel Barnett – senior vice-president of real estate firm CBRE and a Vancouver-based industrial real estate broker – the fact that the sale took place during the pandemic shows the both the strength of the local industrial real estate market and the “optimism of the marketplace for this type of product.”
There’s also been an increased demand for industrial space during COVID-19, said Barnett – something that PC Urban has also seen, at least anecdotally.
“Anecdotal evidence suggests there is a greater need for distribution, warehousing and manufacturing spaces even more so now that the pandemic has highlighted our growing dependence on e-commerce,” said Sawchyn.
“The industrial asset class is poised to continue its upward trajectory due to the increased demand for space and the undersupply in the market, especially for small to medium-sized businesses.”
The partnership between PC Urban and KingSett is a trend that’s likely to continue, said Barnett, as partnering with local developers gives institutional investors like KingSett the chance to access Metro Vancouver’s industrial real estate market.
Metro Vancouver, explained Barnett, is of the “hottest industrial markets, with one of the lowest vacancy rates” in North America.
“It’s so tough to get into our market, especially for people not on the ground here,” he said. “So basically, the local developer will manage the process and get control of the property, and the institution is basically the capital behind it.
“I think we will see more of this in the future, because a lot of the larger institutions, especially ones not in Vancouver, are under-weight in industrial properties in the area.”
And Richmond, said Barnett, is the largest industrial real estate market in Metro Vancouver in terms of square footage, and north Richmond will always be the “superior location for businesses,” especially when compared to its counterpart in south Richmond.
“Due to its location, being where Highway 99 and Highway 91 intersect, its proximity to Vancouver, the airport, the US border, as well as being in close proximity to the SkyTrain…(and) the amount of amenities that are around No. 3 Road,” he said.
Given that, said Barnett, industrial space in north Richmond “will always generally have premium lease and sale price,” when compared to industrial space in south Richmond, centred around the Ironwood area – which has reduced transit access, and is close to the George Massey Tunnel and its associated congestion, he added.
In fact, it’s the delayed replacement of the Massey Tunnel and worsening congestion along the Highway 99 corridor that have caused prices in south Richmond to lag behind, according to PC Urban.
The development firm says that the average net rental rate – what the tenant will pay in rent plus other fees, or operating costs, such as property taxes – in north Richmond has increased by more than 40 per cent between 2017 and 2019.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
