Vancouver’s multi-millionaires’ row on Alberni Street is picking up steam again after a lull in the luxury West End market these last few years.
Since 2018, the West End condo market had slowed, particularly at the luxury and ultra-luxury end. But as the world slowly returns to normalcy, and immigration and tourism with it, the downtown luxury market is ready to do business again, says developer Kevin Cheung, chief executive officer of Landa Global Properties.
The company has invested heavily in Vancouver’s Alberni Street power corridor with three projects, including a pair of passive house 43- and 48-storey towers at 1468 Alberni St. An entire city block of apartment and office buildings will make way for the heritage-style towers, designed by New York’s Robert A.M. Stern Architects, with Vancouver MCM Partnership. His 1650 Alberni tower, in partnership with Asia Standard Americas, is being designed by SOM, the architects behind the One World Trade Center in New York.
When interviewed a year ago, Mr. Cheung said developers who had projects to launch had put them on hold. He described the mood as one where developers were cautiously waiting and wondering who’d have the courage to launch first. This year, the mood is a little different, and so he is one of the first to launch presales, for his 1818 Alberni project, which had been on pause.
“With the immigration and tourism coming back and people coming downtown, we wanted to basically put our project into the market,” said Mr. Cheung. “We’re confident in the market, but it’s not a proven market yet. We are not in full-on recovery where everything is coming back and there’s lots of product launching. We’re not there yet. But we have so much in the pipeline in the Alberni corridor, so we need to get going.”
Mr. Cheung said other developers who haven’t launched their marketing efforts yet are in a holding pattern, waiting for buyers to return. Bosa Properties’ 1515 tower, designed by German architect Ole Scheeren and part of a global trend for “jenga”-style high-rise buildings, launched last fall. It came just after the launch of Jim Pattison Developments’ 2 Burrard Place.
As for other luxury projects in the West End, Mr. Cheung says, “they haven’t launched, but I know they are in the planning stages. During our market meetings, [marketer] Bob Rennie presented a bunch of figures of all the projects that have potential to launch in the 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-storey, 54-unit boutique tower designed by Rafii Architects. It is one of the shorter buildings because it’s near Stanley Park, and it caters to the sort of buyer who appreciates an exclusive view and a Rolls-Royce car service. The price 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, he said.
Initially he’d planned to build two units per floor, but because of 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-bedrooms have been selling fastest, with starting prices at $3.8-million. The two-bedrooms start at $1.8-million.
“For a project downtown, having 2,000 square feet, half a floor plate, is very rare,” he explains. “I don’t think you’ll get this offering again on Alberni Street, except for penthouses. To have a stack of large three-bedrooms with water views is very unique.”
Alberni Street has had luxury retail for years, but in terms of housing it’s now a newly emerging multi-millionaires’ row. It’s becoming the show pony 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 on the downtown peninsula between West Georgia, Burrard, Stanley Park and English Bay. Andy Yan, director of Simon Fraser University’s City Program, said that the median household income in the West End is only $51,000.
“I think in the West End Community Plan they put all the tallest densities on Alberni Street and a bunch of sections that don’t have social housing requirements. The City designated the street as being very high end,” Mr. Cheung said.
“I’m sure you have heard about comparisons to Rodeo Drive, where Alberni starts off at one end with luxury brand retail and a small segment of residential and it ends with Stanley Park, so it’s a very limited offering. With the heights and basically with building policy, we had to show leadership in design and sustainability, and it led to all these ‘starchitects’. That’s how it formed.”
As for the buyers, Mr. Cheung said he didn’t know about the demographic but he believed that they were end users, not investors.
The pick-up in the luxury market, however, also coincides with increased immigration and tourism, which indicates that foreign wealth is driving the market.
Condo marketer George Wong, principal of Magnum Projects, said the downtown market slowed in 2018 and continued to stall for the next several years, with a bit of pickup in the fall of 2020. By 2021, developers began launching projects that had been waiting on the sidelines. The luxury market isn’t quite where it was, but the expectation is that it will gain momentum.
Mr. Wong marketed Three Harbour Green more than a decade ago, and the penthouse that sold then in the $11-million range is now listed for $49-million. The market for that type of home is extremely niche, however.
“That is for the super, super, super wealthy … there are very few people on this planet who can afford that, and that calibre of people are people who don’t even live here full time. It’s a second house.”
Last summer, he marketed 2 Burrard for $1,900 per square foot, and that project did “exceedingly well,” says Mr. Wong. There are degrees of luxury in the West End, he says.
“The luxury condo would be the $2- to $5-million price range, and high luxury would be in the $5- to $12-million price range. I would say the luxury price range under $5-million has done decently, but it’s not back to where things were in 2017. The high luxury market still has to find its way back, because we are missing the super wealthy. And COVID had stopped a lot of the international travelling. But once that opens up again … Canada is so sought after for living purposes and for kids’ education purposes, for just safety purposes.”
Very few locals can afford that type of product, he says.
“Even our high luxury market product is cheap [for international buyers].”
In order to attract investors to 2 Burrard, they lowered the prices and made the suites smaller.
“There was a lot of anxiety about how people would react to downtown, so at 2 Burrard we had 239 homes and we wanted to make sure we had a good calling card for investors’ budget and appetite.
“Investors had stayed away from downtown for awhile. So we were quite mindful, and really concerned about it, and not sure if they would be back. … We wanted to be more on the conservative side to test the market, so we also made the suites smaller to attract the investor.”
The result was that more than 65 per cent of the project sold to investors.
“That’s pretty healthy. We were very happy with how it turned out.”
Once China emerges from lockdown and those buyers return, the downtown market should pick up even more, he said. Buyers from around the world buy in Vancouver, but China is the key global buyer: wealthy buyers with disposable capital.
And foreign wealth drives the super-high-end towers that are arriving downtown, said Mr. Wong. That’s been the phenomenon for about 15 years. Although Chinese cities are in lockdown, those buyers are still finding a way to buy properties in Vancouver. And for those very wealthy buyers, many of the homes are secondary properties, not primary residences, he says.
“A lot of people from China are not able to travel, but once that gets relaxed, we are going to see a large influx.
“People are finding ways to send money over here. Living in China has not always been a poster boy of livability, right? And Vancouver is very attractive.
“Some are getting their money out and buying without coming here.”
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