West Vancouver has long been recognized as an affluent, limited-growth, high barrier to entry market among all asset classes. As a result, there has been a limited amount of transaction activity over the past several years. Valuations remain stable with continued growth as a result of lack of new supply and increasing rental rates. Current market dynamics for each asset class in West Vancouver are summarized below:
Office
Office space in West Vancouver comprises only a fraction of that available on the North Shore and is limited primarily to a handful of buildings in the Marine Drive and Bellevue areas. The balance of available space is typically in smaller strata or mixed use buildings which reflects the demand base of professional and medical services.
There have been few office transactions in this market, with pricing for larger freehold assets typically ranging in the $450-500 per sq ft range, with cap rates of between 5.0-6.0%.
Retail
Retail continues to be in high demand in West Vancouver as an investment, particularly due to the ongoing demand on behalf of retailers to be part of this market and no new opportunities to develop. Well established nodes include Park Royal, the Marine Drive corridor, Dundarave Village and Caulfield Village Shopping Centre.
Retail assets that have traded over the past 5 years have typically been streetfront retail, with most sales occurring in the Marine Drive area. Cap rates for retail tend to be between 5.0% and 6.0% in this market, and have exhibited average prices as follows:
Apartment
The lack of sales activity for multifamily assets in West Vancouver reflects the desirability of the market from an income perspective, particularly given high demand spurred by prohibitive housing costs in the area, an aging population, and lack of opportunities for new development.
A
partment buildings that have traded have typically been at capitalization rates around 4.0% and at prices per unit of approximately $300,000 depending on the age of the building.
Bellevue Tower, 195 21st Street, a 126 unit concrete highrise apartment tower sold in June 2010 to Hollyburn Properties for $36,500,000, 3.8% cap rate.
Quick Facts on Apartment Market:
- Overall vacancy rate is 0.6%
- Overall average rent is $1,462
- 2,329 total private apartment units (not including rented condos)
- 2.1% average rent growth in 2010
Source: CMHC
For information on current opportunities in this market, contact Simon or David.
