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October 9, 2013
Robson Rates on the Rise
A Colliers study released this morning analyzing leasing at the worldâs high-end shopping corridors shows Vancouverâs Robson as the second priciest in Canada, at $200/SF. (Torontoâs Bloor is No. 1, at $315/SF.)
What was more dramatic though was the increase in those rates for Robson over the last year--a 33.3% jump. (Somebody's been doubling down on their Wheaties.) Alberni was ranked fourth in Canada, at $150 (43% increase), followed by Granville, at $125 (2% decrease). Colliers International VP retail consulting James Smerdon tells Bisnow that the Granville decrease is a bit of an anomaly. "The decrease there is not reflective of the entire street," he says. "There was not a lot of vacancy on Granville. There wasn't a sample of deals to get good data from."
Luxury retailers are opening up to the Canadian market, and space here is still a bargain, James adds. Vancouver is a popular Pacific Rim destination for people travelling from places like mainland China. (Everybody wants to see where they film all the TV shows that take place in NY.) "Many people are very brand conscious, which is really attractive to the luxury sector." While Canadian markets enjoy that spike in rental rates, reflective of where the luxury market is heading, we still don't compete with luxury destination draws like New York's Fifth Avenue ($3,052USD) or Hong Kong's Queen's Road Central ($2,087USD). "In most of our major markets, these ultra-high end luxury brands have a number of streets to choose from," James adds. "In some of the international destinations, they are only looking at one street, which really spikes those rents in markets like Paris and New York that much higher."
No Curb in Appetite for Real Estate Investment
Some initial trends from a study on commercial real estate investment in Canada released by Avison Young this morning: initial interest rate hikes haven't impacted the flow of investment capital into the sector, on either side of the border, in the first half of 2013. One area to keep an eye on will be the buying habits of interest-rate-sensitive REITs, which have been aggressive when it comes to acquisitions, according to AY director of research Bill Argeropoulos.
The report covers commercial real estate investment conditions in 24 regions across the U.S. and Canada, including Vancouver. Canada is on track to meet or exceed 2012's volume of sales, the report says. (Now that people aren't afraid of the Mayan apocalypse, things are picking up nicely.) There was almost $2B invested in commercial real estate in Vancouver in the first half of 2013, near-record levels. AY principal in Vancouver Michael Gill (here with AY's Bob Levine) says there's plenty of capital in the hands of pension funds and life insurance companies looking for investment properties with strong fundamentals. What the markets needs he adds are more sellers who recognize that it is a very opportune time to sell based on current market conditions.
Advocacy Ramps Up
CBRE VP industrial properties Chris MacCauley spoke to us about the report he authored with NAIOP that addressed the future squeeze on available industrial land throughout Metro Vancouver if changes aren't made. The task now is to get policymakers the data to make educated decisions regarding the future needs for industrial land and how that relates to a local economy facing challenges in the future and a population base that is expected to increase significantly over the next 20 years. Next steps being pursued, says Chris, is getting NAIOP, UDI and ULI together on Oct. 22Ã to talk policy persuasion. "We need to find a balance for the land needs of all our economic drivers [especially agriculture, the port, manufacturing and distribution] in the province," he tells us.
Ivanhoe Projects Take Advantage of Transit
It's interesting to watch the progress on several fronts made by Ivanhoe Cambridge in this market, as it develops mixed-use communities. Oakridge Centre, which we wrote about yesterday, is the only designated Municipal Town Centre within the City of Vancouver, and, if the re-zoning application is approved by the city, will transfer what is now a mall into a comprehensive community. Ivanhoe is focusing more on real estate projects, especially in Canada.
Ivanhoe's VP retail development, Western Canada, Graeme Silvera also points to Brentwood Town Centre, Metrotown (which Ivanhoe also owns) and Surrey City Centre projects as a growing investment trend. "It's all about adding significant density to take advantage of proximity to transit," Graeme tells Bisnow, referring specifically to the Canada Line. "The Oakridge redevelopment proposal [photo] is significant in redefining community planning and future growth within the Metro Region. It is designed as a true mixed-use community--including retail, residential, office and a wide range of community amenities--a prototype for a culturally and environmentally sustainable model."
Come to Our National Data Center Event!
We're holding our big national data center event this year at the Ritz Carlton in Dallas on Nov. 13--350 top data center users, owners, developers, investors, lenders, and designers from around the country. (We all it "DICE" which stands for something with the words "data center" in it.) Hear amazing speakers from Digital Realty Trust, T5 Data Centers, QTS, Compass Datacenters, Carter Validus, Cisco, 451 Group and many others. Oh, and a Casino Night thrown in! Sign up now.
What kind of an impact will the oncoming shortage of industrial land will have on the local economy. Send your thoughts to firstname.lastname@example.org)