The Richmond Airport Executive Park has capacity for up to 655,000 square feet of additional development, according to new owner Fiera Real Estate. (Courtesy Colliers International)

Montreal-based Fiera Real Estate says it could boost the density at its recently-acquired Richmond Airport Executive Park (AEP) by more than 650,000 square feet, but no immediate plans are in the works.

Earlier this year Fiera bought the 13-building office complex in Richmond, B.C. for $208 million, making it one of the largest commercial property deals of the year in B.C. The 707,809-square-foot complex sits on a 31.5-acre lot at Shellbridge Way, a short drive from Vancouver International Airport.

It is currently 97 per cent occupied.

Previous owner Sun Life Financial listed the campus for sale about a year ago with CBRE. The complex includes offices of The Keg, Boston Pizza, Netgear and other high-profile tenants and it has offices that range in size from 500 to 100,000 square feet.

Sun Life had built and expanded the campus from 1974 through 2008.

Fiera likes airport proximity

The campus’ proximity to the airport was one of its most attractive qualities, said Blair McCreadie, Fiera Real Estate’s executive vice-president and fund manager. He said Fiera purchased the property for its Fiera Real Estate CORE Fund.

The CORE fund includes a pool of investors and assets across the country in all four main asset classes: industrial, office, retail and multi-family residential.

“With 4.9 years of weighted average lease term, the purchase represents the fund’s first Vancouver-area office acquisition,” McCreadie said.

As they worked through the deal, the team kept coming back to the idea that buying a major office asset so near an international airport made for a rare opportunity.

The purchase also positions Fiera with property in a district where office vacancy rates have been steadily dropping since 2015. The Richmond submarket had a vacancy rate of six per cent at the end of Q1 2019 according to Colliers International. Regions outside the downtown core of Vancouver have been benefitting from an ongoing space crunch in the CBD, where vacancy has dropped to 2.5 per cent.

City wide, Vancouver had an office vacancy rate of 3.8 per cent, down 700 basis points from Q4 of 2018.

Fiera Real Estate is an affiliate of Fiera Capital Corporation (FSZ-T), which had approximately $144.9 billion in assets under management as of March 31. Fiera Real Estate, which itself has about $3.5 billion in AUM, has just undergone a rebranding from its previous name Fiera Properties.

The new branding came into effect on July 3: “This represents a rebranding of the business in order to better reflect who we are and what we do – all aspects of our services and operations remain unchanged,” the company said in a release.

Richmond Airport Executive Park growth

McCreadie said rents at the Richmond property could be boosted via tenant turnover, and redevelopment potential exists if one of the buildings were to become empty. The property is zoned to permit an additional 655,000 square feet on top of the existing campus footprint.

He said there is no large-scale redevelopment planned for the immediate future.

Fiera has changed property management for the site and is also pursuing various sustainability certifications for the campus.

“We just want to keep it going and improve where we can,” he said. “(There are) no major changes proposed.”

The CORE fund is open ended and the intention is to hold the business park “forever”, McCreadie said. “(We have) no intention of ever selling it.”

McCreadie told RENX earlier this year Fiera is expecting a bold 2019 with acquisitions in the $600 million range. Vancouver is one of its target markets for that growth.

“Downtown (Vancouver) office would be top of mind in terms of expanding and growing quite significantly,” he said.