Confidence isn’t peaking, but one of the emblematic projects of the correction that hit B.C. real estate markets during the latter half of the 2000s shows that developers are taking a measured approach to the new environment.
Anthem Properties Group has redesigned the former Bambu project in Victoria, a site it acquired from the Amadon Group in late 2005 and shelved a few months later due to the economics of the $45 million project in an environment of fast-rising construction costs and cooling demand. It was one of the first projects in the province to return deposits to buyers in the nascent downturn that picked up steam two years later when financial markets crashed.
Rechristened Union, the project’s new incarnation proposes 133 units in two five-storey blocks on a site bounded by Pandora and Fisgard streets. That’s down from the original count of 161 units and seven storeys. The units proposed have also been scaled down, and now average 530 to 600 square feet apiece.
The changes give the project an efficient design Anthem expects will be cheaper to build and easier to sell when – if city gives the go-ahead – marketing begins in spring 2011.
“There were just so many different unit types, and that’s what made the previous project a lot more expensive, a lot more complex,” said Sylvia Yung, vice-president, communications, for Anthem. “We’ve simplified it; we’ve made it a lot more efficient to build.”
Plans for Union reflect not just the historic rebound in residential markets in B.C. over the past 18 months but also the stand-out nature of construction. Tallies for building permit volumes in the Lower Mainland-Southwest region in October, for example, showed the biggest increase since June 2007.
Meanwhile, resumption in the new year of the Multisport Centre of Excellence in Burnaby after being on hold for more than two years is buoying the fortunes of MHPM Project Managers Inc.
A year ago, MHPM was getting ready to more than double its office space with a move into 7,400 square feet at City Square. With better economic times this past spring, it has been able to hire 11 new employees since June, bringing its total staff to 38, and last week it opened an office in Kelowna. A location will open in Victoria in early 2011 to handle a growing roster of clients. This year alone has seen it sign 15 new clients.
While stimulus funding for several projects ensured steady work for MHPM through the recession, diversification into strategic advisory services and assisting clients such as BC Hydro become more energy efficient have contributed to its growth.
Its own offices seem a world apart from the retail area of City Square, with warm wood panelling accenting the open spaces with abundant natural light (when there’s light to be had). After hours, section-specific lighting and heating provide staff a comfortable work environment while cutting energy costs. Many of the fixtures were repurposed from MHPM’s former offices, contributing to LEED-CI Gold certification for the space, which can accommodate up to 50 people.
Watch for announcements of major new contracts for the firm, which is owned by Vancouver-based Colliers Macaulay Nicolls Inc.
Stalled projects may be resuming, but dangers remain. Work at the much-anticipated Metrotower III in Burnaby, for example, is effectively on hold while developer Ivanhoe Cambridge seeks pre-lease commitments. There has been some interest, but no deals.
Gordon Wylie, Ivanhoe Cambridge’s director of development, said the parkade has been built, leaving work above grade yet to rise. The current timeline calls for completion of the 400,000-square-foot tower by June 2013.
“We are committed to completing Metrotower III,” Wylie said.
It’s déjŕ vu for a project that was to occupy a podium originally built in 1991, just before a market change nixed plans for the site. The development of significant new office projects in downtown Vancouver as well as a spike in office vacancies following the implosion of the tech bubble in 2001 also worked against the project’s construction.
When plans to revive the project were announced in 2008, Ivanhoe Cambridge touted vacancies of 0.3% in triple-A office space in Burnaby as well as proximity to transit, shopping and other amenities as points in the project’s favour.
Today, tighter financing conditions and triple-A vacancies in the 5% range (according to Colliers International) make pre-lease commitments sine qua non for many new projects.