On the block
Burrard Street north of Georgia is witnessing heated action this year, following the $143 million sale of the Hyatt Regency Vancouver earlier this year. Joining the offering last month of Bentall Centre, RBC Capital Markets has quietly started marketing Royal Centre at the corner of Burrard and Georgia streets on behalf of owner Brookfield Office Properties.
The 589,000-square-foot complex includes a 454,000-square-foot, 37-storey office tower, 44,000-square-foot RBC banking centre and 91,000 square feet of retail space. Bids for the property are welcome until early December.
The property is Brookfield’s only asset in Vancouver. Sources suggest the sale is an opportunity for Brookfield to streamline its portfolio for an attractive return at a time of strong demand and high valuations.
While the property has an assessed value of $287.5 million, word on the street suggests it could trade for something in the range of $350 million. (A block north, in 2012, Bentall 5 traded for $396 million.) With well-located assets such as Royal Centre and Bentall Centre seldom available for purchase, competition – and, in turn, price – is likely to be strong.
“Overseas private capital persists in driving the investment market, along with institutional investors and pension funds,” remarked Colliers International in a recent review of the market. “Capitalization rates continue to compress as off-market transactions and unsolicited offers to purchase sustain historically high prices in Metro Vancouver.”
Lao Feng Xiang hits Alberni
A half-block south of Royal Centre, the project management division of Jones Lang LaSalle (JLL) recently helped Shanghai jeweller Lao Feng Xiang (LFX) debut on Alberni Street.
CBRE Ltd. handled lease arrangements for the luxury retailer, but a compressed, nine-month timeline required local expertise to ensure the 2,200-square-foot store opened by September. The 12-member project and development services team in JLL’s Vancouver office stepped in to help LFX navigate the local approvals process and connect with a local design team led by SSDG Interiors Inc., which specified wood and stone for the finishes to give the shop a West Coast feel.
“We really wrapped our heads around the overall schedule and making recommendations so that we could put the right products in front of them to improve and deliver their space on the timeline,” said Tim Gilmour, vice-president, project and development services, with JLL.
JLL launched its project management division four years ago. It works closely with tenant representatives to ensure a seamless flow from leasing to occupancy. The division handled development of Microsoft’s store in Pacific Centre and Amazon’s premises in Telus Garden.
Engel & Völkers steps in
Another luxury brand has also stepped into Vancouver’s real estate market, but as a broker of property rather than an occupier. Hamburg, Germany-based Engel & Völkers has expanded aggressively across Canada this year, leaping to seven offices from zero since February. Victoria and Nanaimo were its first offices in B.C., but last week it announced that the Yaletown office of Sotheby’s International Realty Canada, managed by Greg Carros – the top-grossing Sotheby’s office in Vancouver – would join its network.
Anthony Hitt, CEO of Engel & Völkers North America, said he expects ongoing negotiations to yield additional locations in B.C. in 2016. Connections with international destinations as well as with markets where Engel & Völkers already operates are key. An area’s appeal and the presence of exceptional properties are also crucial.
“We go in and we look at who’s in that area, who’s doing business with the type of clientele, the type of properties our brand is associated with,” Hitt said.
With an office in Calgary and renewed demand this year for Okanagan properties, the B.C. Interior is on Engel & Völkers’ radar. The next office to open after Vancouver, however, is Mont-Tremblant, in Quebec. •
