Vancouver’s billionaires’ row on Alberni Street is picking up steam again after a lull in the West End luxury market in recent years.
Since 2018, the West End condo market has slowed, particularly at the luxury and ultra-luxury end. But as the world slowly returns to normal, and immigration and tourism with it, the downtown luxury market is ready to do business again, says developer Kevin Cheung, CEO of Landa Global Properties.
The company has invested heavily in Vancouver’s Alberni Street power corridor with three projects, including a pair of 43- and 48-story passive house towers at 1468 Alberni St. An entire city block of apartment and office buildings will make way for the style traditional. towers, designed by Robert AM Stern Architects of New York, with the Vancouver MCM Partnership. His 1650 Alberni tower, in association with Asia Standard Americas, is being designed by SOM, the architects behind One World Trade Center in New York.
When interviewed a year ago, Mr. Cheung said that developers who had projects to release had put them on hold. He described the mood as one where developers were cautiously waiting and wondering who would have the courage to launch first. This year, the mood is a bit different, which is why he is one of the first to launch pre-sales for his 1818 Alberni project, which had been on hiatus.
“With immigration and tourism coming back and people coming downtown, we basically wanted to put our project on the market,” Mr. Cheung said. “We trust the market, but it is not yet a proven market. We are not in full recovery where everything is coming back and there are a lot of product launches. We are not there yet. But we have a lot going on in the Alberni corridor, so we need to get going.”
Mr. Cheung said other developers who have yet to launch their marketing efforts are in a holding pattern, waiting for buyers to return. Bosa Properties’ 1515 tower, designed by German architect Ole Scheeren and part of a worldwide trend of “jenga”-style high-rise buildings, launched last fall. It came just after the launch of 2 Burrard Place by Jim Pattison Developments.
As for other luxury projects in the West End, says Mr. Cheung, “they haven’t gotten off the ground, but I know they’re in the planning stages. During our market meetings, [marketer] Bob Rennie laid out a bunch of numbers for all the projects that have the potential to launch next year. There are a lot of players in the same boat in terms of waiting to go.”
Two weeks ago, Mr. Cheung began previews for 1818, a 21-story, 54-unit boutique tower designed by Rafii Architects. It’s one of the lower buildings because it’s close to Stanley Park, and caters to the type of shopper who appreciates an exclusive view and Rolls-Royce car service. Pricing is $2,300 to $2,400 per square foot, and as of last week, Mr. Cheung had already sold about 18 units in the building. Those prices are conservative compared to pre-pandemic prices, he said.
Initially, he had planned to build two units per floor, but due to the pandemic downturn, he reconfigured the floor plates to include two smaller two-bedrooms and one three-bedroom that takes up half a floor. To his surprise, the three-bedroom apartments have been selling faster, with asking prices of $3.8 million. Two-bedroom apartments start at $1.8 million.
“For a downtown project, having 2,000 square feet, half a floor plate, is very rare,” he explains. “I don’t think you’ll ever have this offer on Calle Alberni again, except for penthouses. Having a stack of large three-bedroom apartments with water views is very unique.”
Alberni Street has had luxury stores for years, but in housing terms it is now a new row of emerging billionaires. It is becoming the show horse for elaborate architecture and equally decadent lifestyles. Mr. Cheung says the transformation was largely the result of the city’s West End Community Plan, which covers the area in the center of the peninsula between West Georgia, Burrard, Stanley Park and English Bay. Andy Yan, director of the Simon Fraser University City Program, said the median household income in the West End is just $51,000.
“I think in the West End Community Plan they put all the highest densities on Alberni Street and a bunch of sections that don’t have social housing requirements. The city designated the street as very high-end,” said Mr. Cheung.
“I’m sure you’ve heard of comparisons to Rodeo Drive, where Alberni starts at one end with luxury brand retail and a small residential segment and ends with Stanley Park, so it’s very limited supply. With the heights and basically with the construction policy, we had to show leadership in design and sustainability, and that led to all these ‘star architects’. That’s how it was formed.”
As for the buyers, Mr. Cheung said he didn’t know the demographics but believed they were end users, not investors.
However, the uptick in the luxury market also coincides with rising immigration and tourism, indicating that foreign wealth is driving the market.
Condo marketer George Wong, director of Magnum Projects, said the downtown market slowed in 2018 and remained stagnant for the next several years, with a bit of a recovery in the fall of 2020. By 2021, developers began launching projects. that they had been waiting for. the margins The luxury market is not exactly where it was, but the expectation is that it will gain momentum.
Mr. Wong marketed Three Harbor Green more than a decade ago, and the penthouse that sold at the time in the $11 million range is now listed for $49 million. However, the market for that type of house is extremely specialized.
“That’s for the super, super, super rich… there are very few people on this planet who can afford that, and those caliber of people are people who don’t even live here full time. It is a second home.”
Last summer, he marketed 2 Burrards at $1,900 per square foot, and that project worked “really well,” says Mr. Wong. There are degrees of luxury in the West End, he says.
“The luxury condo would be in the $2 million to $5 million price range, and the high luxury would be in the $5 million to $12 million price range. I would say that the sub-$5 million luxury price range has done decently, but it hasn’t returned to where things were in 2017. The high-luxury market has yet to find its way back, because we’re missing the super rich. And COVID had stopped a lot of international travel. But once it opens up again… Canada is highly sought after for living purposes and for children’s education, just for security purposes.”
Very few locals can afford that type of product, he says.
“Even our high-end market product is cheap [for international buyers].”
To attract investors to 2 Burrard, they lowered prices and shrunk suites.
“There was a lot of anxiety about how people would react to downtown, so at 2 Burrard we had 239 houses and we wanted to make sure we had a good cover letter for the budget and investor appetite.
“Investors had stayed away from the center for a while. So we were pretty aware and really worried about that, and we weren’t sure if they would come back. … We wanted to be more conservative to test the market, so we also made the suites smaller to attract the investor.”
The result was that more than 65 percent of the project was sold to investors.
“That’s pretty healthy. We were very happy with how it turned out.”
Once China comes out of lockdown and those buyers return, the core market should recover further, he said. Buyers from all over the world shop in Vancouver, but China is the key global buyer: wealthy buyers with capital on hand.
And foreign wealth is driving the very high-end towers that are coming to the city center, Wong said. That has been the phenomenon for about 15 years. Although Chinese cities are in lockdown, those buyers are still finding a way to buy property in Vancouver. And for those very wealthy buyers, many of the homes are secondary properties, not primary residences, she says.
“Many people from China are unable to travel, but once that relaxes we will see a huge influx.
“People are finding ways to send money here. Living in China hasn’t always been an example of livability, has it? And Vancouver is very attractive.
“Some are taking their money and buying without coming here.”
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