Business in Vancouver October 2-8, 2007; issue 936
Real estate roundup: Peter Mitham
Office towers consider more storey time
Demand is kick-starting more vertically phased developments in Metro Vancouver
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Central Park Place
Bosa Properties Inc. recently invited a variety of people, including reporters, to contribute to a time capsule placed within the structure of Central Park Place, the Metrotown tower where six storeys are being added to serve growing office space demand.
Central Park Place is the latest in a string of vertically phased Lower Mainland projects, which add storeys as demand warrants. It’s a phenomenon perhaps best – and most dramatically – illustrated by Vancouver’s Bentall 5, which added 12 storeys earlier this year to boost its height to 34 storeys. Central Park Place is shorter, but the extra six storeys will bring it to 18 storeys on completion in January 2008. Originally built in 1999, the addition by Bosa, in partnership with the Fox Group, adds 68,000 square feet of space to the property. The extra space is fully leased.
With the time capsule set for opening in 2057, it’s fun to speculate what office leasing conditions will be like then. But even without a crystal ball, it’s a good bet that land constraints will still be with us and developers will still be seeking innovative building types that make the best use of available sites.
Barring a natural calamity, the population doesn’t seem set to shrink. Current projections suggest Metro Vancouver’s population will exceed four million people by 2057, leaving no doubt that intensification of land uses will continue well into the future.
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Green premium obeys market
Of course, one may well ask where sustainability figures into a vision of the future.
Condo marketer Bob Rennie quipped during an interview earlier this year that Monday’s green is Friday’s light green, and that’s definitely the case with commercial properties as tenant demand adds value to green elements in building design.
Indeed, a recent Colliers International survey of opinions in Montreal, Toronto, Calgary and Vancouver reports that 91% of tenants would favour a building marketed as green over a similar property and 63% of tenants are willing to pay a premium on gross rent for environment friendly office space.
But the form of that friendliness is another issue. While 35% of tenants would pay up to 7% extra for a generally sustainable space, just 26% would pay the same premium for a building that reduces utility consumption by 30%.
How much tenants are willing to pay for green features is going to be a function of broader market forces, said Paul LaBranche, executive vice-president of the Building Owners’ and Managers’ Association of B.C. BOMA initiated GoGreen, a waste-reduction program that targets energy savings, recycling and other measures.
While tenants want a green building, LaBranche said they’re willing to pay more if overall operating costs are lower.
On another note, the Colliers report found that 39% of tenants believe “sick leave, productivity, turnover and low morale” had minimal or no effect on their company or were ignorant of the impacts altogether. An even 10% deem these factors to have “no impact.”
Given the employee retention struggle many companies have, this nugget does, somehow, explain a great deal.
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Homeownership rises
The number of homeowners in Vancouver grew faster in the five years leading up to 2006 than in the previous five years, according to the most recent release of information from last year’s census.
While renters continue to outnumber homeowners in Vancouver, Statistics Canada reports that 48.1% of all residences in the city are owner-occupied compared with 43.8% in 2001 and just 41.9% a decade ago.
Provincewide, the proportion of homeowners posted even greater gains with 69.7% of residences owned last year versus just 52.9% in 1996. That doesn’t mean homeownership is any more affordable, however.
The latest RBC Financial Group survey of housing affordability reports that home ownership continues to lie beyond the reach of the average B.C. resident. A 900-square-foot condo requires 34% of household income, while a 1,000-square-foot townhouse will require 47.9% (that extra 100 square feet comes at a price).
The Vancouver market remains in the seller’s favour, RBC added, despite detached homes requiring more than 70% of household income, a townhouse 51.1% and a condo 35.5%. •
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Business in Vancouver October 2-8, 2007; issue 936
Capers the latest casualty in B.C.’s escalating grocery war
Urban Fare and Nesters chains grow as Capers and Safeway reduce the number of their regional outlets
Glen Korstrom
Capers’ Community Markets’ status as second banana to the Whole Foods brand was confirmed last week in the midst of an escalating war for local market share in the retail grocery sector.
Whole Foods Market Inc. (Nasdaq:WFMI) announced September 25 its plans to close West Vancouver’s Marine Drive Capers on October 27.
Whole Foods’ regional president Ron Megahan later told Business in Vancouver the 20,000-square-foot Capers at Cambie Street and West 16th Avenue might close if its sales don’t measure up when the 51,000-square-foot Whole Foods store opens at Cambie Street and Broadway early next year.
“We’ll have to see where the volume will settle out,” Megahan said of those two stores. “I would say that the future is more focused on the Whole Foods name.”
Texas-based Whole Foods finalized its merger with Colorado-based Wild Oats Markets, Capers’ former parent company, in August to become the world’s largest retailer of natural and organic foods.
Megahan said if the Cambie Capers’ sales plummet, he’d prefer to reformat the location and keep it open under the Whole Foods banner. The other option would be to close the store.
The Capers closure leaves the Whole Foods at Park Royal Shopping Centre as West Vancouver’s lone organic foods supermarket.
The 50 staff at the West Vancouver Capers have all been promised new positions at the Whole Foods.
Vancouver’s grocery store landscape, meanwhile, continues to undergo major overhaul.
Overwaitea Food Group-owned Urban Fare opened its second location at the corner of Bute and Cordova streets on September 21. Overwaitea president Steve van der Leest said he plans to open the third Urban Fare next year in the Shangri-la Hotels and Resorts tower at Thurlow and Alberni streets.
Buy-Low Foods Ltd.’s Nesters Market chain opened at Main Street and 28th Avenue in August, soon after president Ric Laidlaw announced plans to open a Nesters at the former Woodward’s site in the Downtown Eastside in 2009.
Almost lost in the shuffle was the August 11 closure of Safeway Canada’s Robson Street store.
Safeway had announced that it would close the store in 2003, but “various factors and other projects” got in the way, said Safeway public affairs manager Scott Gibney.
He estimated that the two-storey, wood-floored development replacing it at the corner of Robson and Denman streets will be finished by late 2008. Gibney said Safeway will take the top floor and other retailers will lease street-level space. The development will also have underground parking.
Safeway’s closure has been a boon for nearby grocers, particularly the Loblaws Inc.’s Extra Foods store in the Denman Place Mall.
Whole Foods’ Megahan said his Robson Street Capers two blocks east has seen a “slight” sales increase.
But Danny Gillies, who is assistant manager at the Denman Street Extra Foods, said his store has increased sales by about 50% and staff to 36 from 30 since the nearby Robson Street Safeway closed.
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Although the frequency of the 50 isn't great, it is convenient enough if you're heading downtown. But if you want to take a bus elsewhere it's a 10 minute walk up to Granville.
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