International online retailer selling Canadian houses like shoes

Chinese real estate portal Juwai—which collects staggering quantities of data on Canadian housing—has struck a deal with online retailer JD.com to start selling homes like shoes.

Juwai markets overseas properties to buyers in China’s Mainland and, according to a JD.com statement buyers can view houses listed for sale “like milk, shoes and other household goods.”

In addition to Canadian real estate, home listings from Australia, the U.K. and U.S. will also be advertised on JD.com—all popular markets for Chinese investors.

JD.com, which is often referred to the Chinese equivalent of Amazon, made a special request for Canadian real estate because of how popular of a commodity it’s become among Chinese consumers.

China forbids capital outflow exceeding USD$50,000, but it’s in the midst of loosening such restrictions and retailers like JD.com—China’s second-largest retailer after Alibaba—are champing at the bit.

However, news about the deal between Juwai and JD.com is bound to inflame tensions between domestic and foreign buyers, whom believe responsible for rising unaffordability.

Countries like New Zealand, Britain, Australia, Switzerland and Singapore, to name a few, have taken measures to protect their housing markets from foreign speculators, while Canada has steep foreign buyer taxes in its two most expensive real estate markets.

by Neil Sharma03 Apr 2018 | .www.canadianrealestatemagazine.ca

Outlook 2018: commercial real estate's new boom

Soaring demand, price momentum point to record-shattering year ahead for commercial, industrial sector.

 

 

 

The unprecedented momentum in Canada’s leading commercial real estate market will carry it well into 2018 and likely further, Vancouver analysts say.

Vancouver has Canada’s lowest office vacancy rate, and new office towers are pre-selling space at record-shattering prices.

The largest industrial developments in Metro Vancouver’s history are underway as industrial lease rates increase and strata values skyrocket.

Eager hotel developers are waging – and losing – battles for land against “insatiable demand” in the residential rental sector.

 

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Move over, housing; commercial is the new real estate boom.

Office

Vancouver’s downtown office vacancy rate plunged 50% in 2017 to 5%, the lowest since 2013, and it is expected to remain at that level for the next three to four years.

The demand has moved up the launch for new office towers, but the earliest won’t open for at least two years. Strata prices and lease rates are therefore expected to top all-time highs in 2018.

Latest example: a new 30-storey Bosa Development tower sold out 170,000 square feet of Class AAA strata space in less than a week in November at an unprecedented $2,000 per square foot.

The downtown office sector is so strong it has even turned blue-chip conservative pension funds into big-time speculators.

Healthcare of Ontario Pension Plan is backing the 33-storey Waterfront Centre 2, and the Ontario Municipal Employees Retirement System is behind a new nine-storey office building and a near-500,000-square-foot tower on Melville Street. All three are being built without pre-leases in place.

The biggest office deal in 2017 involved the Ontario Pension Board and Workplace Safety and Insurance Board together taking a 25% share in half of Cadillac Fairview’s downtown office portfolio, which sold for $1.25 billion.

There appears to be no lack of tenant demand, particularly from Vancouver’s expanding tech sector.

Tech giant Amazon (Nasdaq:AMZN) recently pre-leased 150,000 square feet in Oxford Properties’ new office tower on Dunsmuir Street, and tech companies have taken about half of the new downtown space in the past two years.

Morguard, meanwhile, is said to be itching to start a new 25-storey office tower on West Hastings.

Commercial agents say the sales performance of the new Bosa tower has office developers erasing and rewriting their pro forma: it is expected that office lease rates for top space could edge up over $50 per square foot in 2018 for the first time.

 

But some analysts caution that 2017 – when office sales hit a record $1.86 billion in the first half – might have marked an investment peak.

“The re-emergence of longer periods of due diligence and more measured financial analysis may lessen the exuberance, haste and impatience that [has] characterized much of the transactional volume,” noted Avison Young in a September analysis.

Industrial

At 1.7%, Metro Vancouver has Canada’s second-lowest industrial vacancy rate (behind Toronto), but the real news is the sudden spike in the region’s industrial lease rates.

They surged 12% this year from 2016, the highest increase in three decades, to an average of just under $10 per square foot. Vancouver industrial strata prices are hitting $700 per square foot and cresting over $300 in the suburbs.

And, even with a limited supply, demand is on a record pace.

“Usually, in a market with so little available space, you would expect to see a slowdown in leasing activity as tenants opt to renew and stay put as finding space becomes harder,” said CBRE executive vice-president Norm Taylor. “So it’s been a surprise to see that absorption is keeping pace with last year’s record-setting numbers.”

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Taylor and others expect the industrial pace to accelerate into 2018.

“With [Metro] Vancouver’s economy firing on all cylinders and next year’s GDP growth forecast to lead the nation, we will continue to attract top companies,” Taylor said.

Next year will test the appetite as a 170-acre, $350 million industrial park – the largest ever in Metro Vancouver – starts inking leases for its one-million-square-foot Phase 1.

“We aren’t building on speculation,” confirmed Tom Land, CEO and president of Montrose Properties Ltd., of its Richmond Industrial Centre, though he concedes it wouldn’t be much of a gamble in one of Canada’s biggest and tightest industrial zones.

More than three million square feet of competing space is either proposed or under construction in Richmond. As is the case across most of Metro, some is strata and nearly all is speculative.

Retail

The sale of B.C. retail assets achieved record heights when 55 retail transactions valued at $2.7 billion were completed in 2017’s first half. The dollar volume was primarily attributed to the sale of Oakridge Centre for $961.3 million and a 50% interest in Pacific Centre valued at $650 million for a total of $1.61 billion.

Retail deals captured half of the overall dollar volume and commercial real estate sales in the first half, according to Avison Young.

International investments in Shape Properties’ Amazing Brentwood retail development could be a harbinger for 2018 investment action.

“Retail assets remain in extraordinarily high demand in core and suburban markets alike with strong pricing coaxing formerly reluctant vendors [to sell],” Avison Young noted.

Battle for land

It is not uncommon now to see older Metro Vancouver apartment buildings selling for north of $400,000 per suite, and total sales could hit a record level above $745 million in 2018. The region has a near-zero rental vacancy rate and the highest rents in the country.

“It’s an exciting time in Metro Vancouver and the entire province, and I foresee a strong and positive outlook moving into 2018 and beyond,” said James Blair, vice-president, multi-family, JLL Capital Markets. “There is insatiable demand by investors seeking centrally located apartment rentals.”

Demand for residential development sites, however, threatens the expansion of Vancouver’s hotel sector, which leads the nation with a 93.6% occupancy and average daily room rates of $219.

But it is tough to make a new hotel viable when land prices are topping $450 per square foot.

“Hotel development can’t compete head-on with residential; the two are in a war in Vancouver,” Curtis Gallagher, a broker with Cushman & Wakefield Ltd., told Business in Vancouver.

“I don’t think potential stand-alone new [hotel] builds will pencil out,” said Azim Jamal, co-founder and CEO of Pacific Reach Properties Ltd., which bought the Rosewood Hotel Georgia in July in a blockbuster $145 million deal.

The option is to buy older hotels and upgrade them or to squeeze them into mixed-use projects: the most dramatic example being the 202-room Exchange Hotel now being enclosed within the Exchange office tower in downtown Vancouver.

In 2018, in Metro Vancouver, the challenge for all commercial and industrial real estate is finding space in what should continue to be the hottest market in Canada. 

 

business in Vancouver | biv.com

 

B.C. commercial real estate investment up 83% year-over-year

Real estate sales over $5 million hit a new dollar volume high in 2017, led by institutional buyer demand

 

B.C.’s commercial investment value set a new record-high of $7.5 billion in 2017 – up nearly 83 per cent over 2016’s $4.1-billion value. 

A new year-end investment review from Avison Young Commercial Real Estate notes commercial real estate deals and dollar volumes have continued to rise astronomically since 2015. Avison Young cites a number of reasons behind this acceleration – primarily a divergence of market opinion between vendors and purchasers that has led to more assets for sale by owners and more demand for purchase among investors. 

The report tracks B.C. office, industrial, retail and multi-family property transactions greater than $5 million. Two hundred and thirty property sales were recording in 2017, versus 147 in 2016.

 2017 property sales continued to be led by redevelopment potential, regardless of asset class. 

"Ongoing price appreciation in all asset classes is being driven almost exclusively by land value and redevelopment potential," says Bob Levine, principal for Avison Young. "The acquisition of retail assets has morphed in many cases into land deals with lesser consideration or interest for the income in place or the retail asset itself.” 

Private investors accounted for 87 per cent of transactions in 2017 but only 46 per cent of dollar volume. Institutional buyers accounted for the other 47 per cent of dollar volume recorded in 2017. Institutional buyers were involved in most high-profile transactions of the year, including Cadillac Fairview’s downtown Vancouver office portfolio, Pacific Centre shopping mall, Oakridge Centre and Solo District office sales in Burnaby. 

Retail sales in B.C. claimed the largest portion of sales dollar volume, claiming 48 per cent or $3.6 billion of 2017’s 7.5 billion investment total. 

The year’s single biggest transaction was the $1.9-billion sale of Pacific Centre and surrounding office towers. It was B.C.’s second commercial real estate deal to surpass $1 billion, following the $1.05-billion sale of Bentall Centre in 2016. 

Avison Young do not anticipate a billion-dollar transaction in 2018 and believes institutional buyer demand will slow, leading to an annual dollar volume decrease. 
 

Tanya Commisso Western InvestorMarch 22, 2018

Major impact to B.C. real estate market expected from proposed taxes

New tax policies put pressure on Canadians to sell their secondary properties within the province

Albertans anticipated to look within their own province and to the United States for secondary properties

TORONTO, March 29, 2018 /CNW/ - According to a Royal LePage advisor survey, which consolidated the views of 535 real estate professionals in British Columbia and Alberta, the implementation of new housing taxes outlined in British Columbia's 2018 budget have the potential to significantly impact the province's residential real estate market. While previous provincial measures have targeted foreign homebuyers, the implications of the new tax policies will be much more widespread, primarily affecting domestic homeowners located in B.C., Alberta and other parts of Canada who have made the tourist-focused region their second home.

British Columbia's tax policies within its 2018 budget include the introduction of a speculation tax on qualifying secondary homes, an increase to the foreign buyer tax as well as an expanded list of affected regions and an increase to the property-related school taxes and land transfer taxes on homes worth over $3 million.  

When asked, 85.0 per cent of advisors operating in British Columbia said that the new tax policies have hurt consumer confidence in residential real estate across the province. A further 78.0 per cent of respondents believe that home sales will decrease within the first three months of the announcement of the new policies, while the majority (57.3 per cent) stated that prices will also decrease during the same period of time.

"The expected impact of the proposed housing taxes announced in British Columbia should not be taken lightly," said Phil Soper, President and CEO, Royal LePage. "Homeowners across the province will feel the effects as major policy changes like this are also amplified by a drop in consumer confidence. We saw this happen in 2016 when the previous government launched a tax on foreign investors. A small number of international purchasers withdrew from the market – along with a huge cohort of domestic homebuyers.

"Canadian homebuyers from coast-to-coast were already struggling with new federal restrictions on access to mortgage financing," continued Soper. "We expect the impact of the new government's housing tax policies to be even more pronounced as they will force Canadians, Americans and potential buyers from elsewhere in the world out of the market."

While 77.0 per cent of advisors stated that the provincial regulations will cause interest from international purchasers to decrease, this demographic was ranked last when respondents identified the group that was most impacted by the new policies. When asked, 44.8 per cent of advisors stated that the new housing policies most impacted residents of British Columbia, followed by 43.5 per cent who believed it was Canadians who own or are looking to buy property in British Columbia, but predominantly live in other provinces. Only 11.3 per cent of real estate professionals forecast that the policies would impact international purchasers the most.

"We expect that the new taxes will materially impact communities that rely on recreational property markets for the health of their local economy," said Soper. "There will be some Canadians in British Columbia and across the country that will choose to sell their properties in the province as the new taxes add to the cost of homeownership.

"There are further unintended consequences from these kinds of policy changes," Soper concluded. "If property values decline, property tax revenues decline. Local municipalities will have to deal with this added burden."

When asked, 81.5 per cent of advisors said the new tax policies within British Columbia's 2018 budget have already caused interest from Canadians living outside of the province to decrease, with 73.8 per cent believing that the move will lead the group to sell their property. This is predominantly led by the impending speculation tax, which 90.8 per cent of respondents believe will impact sales in the province from prospective homeowners located in other areas of Canada, like Alberta.

These sentiments were verified by advisors in Alberta, with 80.7 per cent believing that Alberta-based interest in B.C. recreational properties will decrease, and a further 75.6 per cent stating that Albertans who currently own recreational property in British Columbia would likely sell their secondary homes. Instead, it is believed that Albertans will now increasingly look within their own province (72.6 per cent) or south of the border (46.7 per cent) for secondary properties.

Survey Methodology

Royal LePage's advisor survey was conducted online between March 14, 2018 and March 20, 2018, polling a total of 400 Royal LePage real estate advisors from British Columbia and a further 135 from Alberta. Responses were anonymously recorded and analyzed independently.

On March 26th, 2018, British Columbia announced amendments to its speculation tax. These amendments do not change the opinion of Royal LePage and its network of real estate professionals. While the size of the new taxes has been reduced modestly in one of the categories, the entire scope of the new tax regime remains in place. The results of the Royal LePage advisor survey are reflective of current expert opinion on real estate in the region.

 

NEWS PROVIDED BY

Royal LePage

06:00 ET

British Columbia's economy is forecast to remain strong through 2020

VANCOUVER — British Columbia is predicted to have solid economic growth through 2020 by a trade association of credit unions.

Central 1 Credit Union says 2017 was a year of “stellar growth” and the positive momentum will continue in B.C. for the next 24 months, despite a slower housing market.

The new forecast calls for a three per cent growth in the province’s real gross domestic product, which is the inflation-adjusted value of all goods and services produced in B.C.

Growth is expected to slow to just over two per cent next year, but Central 1 economists are calling for a rebound to 3.3 per cent by 2020, marking what they say has been “more than a decade of uninterrupted annual growth.”

Federal lending restrictions, provincial government policies and stepped up home construction will combine to keep a lid on B.C.’s housing market, but Central 1 does not foresee a price correction.

 

Bryan Yu, deputy chief economist at Central 1, says warning flags include trade disruptions due to trade wars or disputes over renewal of the North American Free Trade Agreement, but he says B.C.’s exports are spread across the province, limiting some of the risk.

Yu also forecasts faster wage growth for B.C. workers, as average unemployment moves toward four per cent over the next two years.

“Employers will face increasing challenges in finding workers to support operations as employment is constrained by growth in the labour force due to an aging population,” he says in a news release.

Overall, Yu predicts a surge in investment by the end of the decade as major private and public works projects get underway.

“B.C.’s economy remains in a strong position with consumer demand underpinned by high employment and income growth, rising exports and government spending,” he says.

 

THE CANADIAN PRESS

Published on: March 27, 2018 | Last Updated: March 27, 2018 10:12 AM PDT

BC commercial market set new record in 2017

The commercial real estate market in British Columbia surpassed previous highs for activity and dollar volume in 2017.

Dispositions of 230 office, industrial and retail properties achieved a total of $7.5 billion according to a new report from Avison Young. That almost doubled the previous record set a year earlier ($4.1bn).

Large pools of investor capital helped achieve the record year but that was not the only reason for the strong market.

The low interest environment, mindset of market participants, and a shortage of available development land, all played their part.

Interestingly, while many property owners decided to sell in the belief that significant peaks had been achieved, buyers were happy to pay higher prices believing that the peak is still to come.

"Ongoing price appreciation in all asset classes is being driven almost exclusively by land value and redevelopment potential," comments Avison Young Principal Bob Levine. "The acquisition of retail assets has morphed in many cases into land deals with lesser consideration or interest for the income in place or the retail asset itself. This approach has spread to office and even industrial properties as investors seek to secure land in hopes of redevelopment."

By asset class:

  • Office investment sales activity achieved record levels in 2017 with 46 transactions valued at $2.7 billion, representing 36% of overall record dollar volume of $7.5 billion.
  • Retail assets achieved blockbuster heights in 2017 with 96 transactions valued at $3.63 billion – surpassing the previous record of 59 retail details worth $1.22 billion set in 2015.
  • Robust demand for industrial assets pushed deal and dollar to record levels in 2017 with 88 deals valued at more than $1.2 billion, capturing just 16% of total 2017 investment proceeds of $7.5 billion but claiming 38% of the total number of deals.
  • Multi-family investment activity surpassed the billion-dollar mark for only the second time in BC history after registering more than $1.275 billion in 89 sale transactions in 2017.

Private purchasers remained the most dominant buyer group in 2017, accounting for 87% of transactions but just 46% of dollar value.


by Steve Randall | 22 Mar 2018 | canadianrealestatemagazine.ca  

Lower Mainland commercial real estate unit sales fell in 2017; values climbed 14.5% New data from the Real Estate Board of Greater Vancouver reports total dollar value of sales in 2017 hit $15.7B

There were 2,591 sales of commercial real estate across the Lower Mainland last year, according to new data from the Real Estate Board of Greater Vancouver.

 

This is a decline of 10.4 per cent compared with the 2,891 sales in 2016. Sales remained 11.1 per cent above the five-year average.

 

While the number of sales fell, the total dollar value of all sales increased 14.5 per cent to $15.7 billion in 2017, compared with $13.7 billion in 2016.

 

“The strong economic and employment growth in our province last year helped drive our commercial real estate market in 2017,” said Jill Oudil, president of the REBGV.

 

Sales of all categories of commercial real estate fell last year. Land sales dropped 11.3 per cent year-over-year, reaching 1,061 units, while the total dollar value increased 15.5 per cent to $8.7 billion. Office and retail sales fell 3.8 per cent to 888 units, and the dollar value grew 15 per cent, reaching almost $3.9 billion. Industrial land sales fell 15.8 per cent to 527 units, and the dollar value increased 3 per cent to $1.2 billion. Multi-family unit sales fell 21.2 per cent to 115 units, and the total dollar value increased 17.8 per cent to $1.3 billion.

http://www.westerninvestor.com | Emma Crawford Hampel Business in VancouverMarch 12, 2018

Vancouver Industrial Land Rarer, More Expensive

Vancouver continued to move toward a post-industrial future as 2016 industrial building sales declined even while hitting a monetary record, according to a new Avison Young report.

The Winter 2017 Vancouver Industrial Report found Vancouver industrial building sales hit $192M in 2016 — the highest dollar volume on record for the city. Yet that value was based on 43 sales, which was the lowest number of deals completed since 2009.

Industrial sales in 2017 through Sept. 30 have totaled 35 deals valued at $88.5M, the vast majority of which comprise the sale of cheaper, smaller strata units, which share common space.  “While land prices seem to be starting to stabilize at new highs, rental rates and building pricing are expected to continue to strengthen,” Avison Young Vancouver Vice President Kevin Kassautzki said in a news release. “Vacancy will remain tight with limited relief expected through new construction, as most new projects are likely to feature strata units, which are usually needed to make the pro forma work with these new high land costs in the market,” he said.

The report said Vancouver’s lack of industrial space — it had a vacancy rate of 1.6% in Q3 — has been hurt even more by amended industrial zoning bylaws and community plans. These have triggered the acquisition of industrial properties by investors and developers with an eye to redevelopment. “It is becoming increasingly difficult to distinguish whether a property was acquired for its value as an industrial building or as land for redevelopment,” notes the report, which expects strata unit sales will lead to an increase in the number of industrial deals in Vancouver in 2017 and 2018. 

And just who is buying industrial land is also changing in Vancouver.  “While owner-occupiers have traditionally played an active role in Vancouver’s industrial market, the purchaser profile of freestanding industrial buildings has shifted in the past 18 months to include many more investors and developers,” Avison Young principal Russ Bougie said.  “Owner-occupiers are now largely relegated to acquiring strata units (or relocating to another market or shutting down their business entirely) as rapidly rising prices for freestanding industrial assets have priced many business owners out of the market,” he said.
 

 

December 20, 2017 Ian Johnston, Bisnow Toronto