Baljit Grewal thought she would be gambling her small business when she decided to move it to Surrey from the East Vancouver location she had rented since 1985. Now, five years later, the owner of the Bride and Groom Shop says it ranks among the best business decisions she ever made.
“It was chaos in Vancouver,” Grewal said, explaining that the rent kept increasing on East 50th Avenue near Main Street. Parking was a problem, the building was falling into disrepair and traffic into her store was declining.
By the time she left, her rent for the 1,000-square-foot store was topping $2,000 a month. In Surrey, Grewal purchased 800 square feet of contemporary space in a new Newton area business park for $225,000.
Recently she expanded, taking an adjoining 1,200 square feet of strata space, for $364,000. Her monthly mortgage payments are now about the same as she would be paying to rent half the space in East Vancouver, she estimates.
“Business is good,” Grewal said, noting that many of her former Vancouver clients have also moved to Surrey over the past few years.
Derek McIver also followed his clients to Surrey, leaving aging East Vancouver office space for larger, more modern digs at 152nd Street and No. 10 Highway in April of last year.
“We needed a more central location,” said McIver, sales director for iFreedom Financial Services, adding that most of his brokers and potential clients already live south of the Fraser River.
iFreedom had been leasing 1,500 square feet of Class B/C space on Fraser Street at East 30th Avenue for $29 per square foot. Its new 2,800-square-foot, Class A office in a Surrey business park costs $31 per square foot.
“We were able to upgrade the quality of our building and keep our square-foot cost about the same by moving out to Surrey,” McIver said, “and we now have lots of free parking.”
The move also allows iFreedom room for 34 brokers, compared with a maximum of 15 they could have had in Vancouver and, McIver said, the company is better located to serve his core clients: middle-income families.
“In Vancouver now people are either wealthy or they’re poor,” said McIver, who grew up in the city but now lives in Burnaby. He notes that many Vancouver families move to Surrey for more affordable housing.
Home first
Being closer to home is a key reason why Vancouver businesses are decamping to B.C.’s second-largest city, according to Jordan McDonald, a former Vancouver commercial realtor who co-founded Frontline Real Estate in Surrey in 2010. McDonald explains that many people first move their home to Surrey, and then their business.
It is the “dynamic economy” of Surrey that attracted McDonald, who said many major companies are looking for satellite offices in a city like Surrey that welcomes an estimated 1,000 new residents every month.
Frontline has grown from a staff of two to more than two dozen since it opened, McDonald said.
“We are able to hire top Vancouver brokers for less money because they live in the Fraser Valley and don’t want to commute to downtown [Vancouver] anymore,” he said.
Surrey’s overall lower cost for doing business is likely a major lure for businesses.
The city’s business tax rate, at $15.90 for each $1,000 of assessed value, is the lowest of any Metro Vancouver municipality. (It is $17.70 in Vancouver.)
And, while net commercial lease rates are similar to secondary Vancouver locations, Surrey space is often newer and demands less in taxes and operating costs, McDonald explained.
The number of businesses moving from Vancouver to Surrey is hard to nail down, but Surrey registered 2,334 new business licences last year, up 8.1% from 2010. In the first seven months of this year, 1,324 new businesses opened.
Non-home-based businesses account for 36% of all new business licences, according to Michael McGreer, an economic development analyst with the City of Surrey.
Besides commercial real estate, residential prices are also making an impression. The average cost of a townhouse in downtown Vancouver was $656,941 as of October 31, while one in Central Surrey was $565,900. •
