In an announcement Monday, the companies said current buildings on the 9.7-acre property, which include 160,000 square feet of leasable space, are 100 per cent occupied. PC Urban and KingSett plan to announce redevelopment and repositioning plans for the property this fall.
“This is our largest acquisition to date and it’s a well-positioned, well-known industrial property in a desired sub-market of Richmond where there is currently less than one per cent vacancy,” said Brent Sawchyn, CEO of PC Urban Properties, in the release. “For us, this acquisition is a natural progression of our growth and we are excited to be working with KingSett on reimagining and repositioning this property.”
Financial details have not been disclosed.
The property is located in Crestwood, the largest and most active sub-market in Richmond for industrial properties. The new owners say Viking Way Business Centre boasts a highly functional design, extensive frontage, an attractive look and design, and offers proximity to highways and transit.
Viking Way Business Centre
The single-storey, small-bay buildings are home to numerous light industrial businesses in biotech, electronics, aerospace, building products distribution, media, technology, textile and service businesses.
Demand for Viking Way Business Centre remains strong due to the park’s maintenance and appearance, along with its mix of unit sizes and dock/grade loading options.
“This partnership was attractive to us for a number of reasons,” said Andrew Kirkham, the Western Canada vice-president for KingSett Capital.
“Working with PC Urban Properties allows us to leverage local area knowledge and they have a strong track record for redeveloping industrial assets across Western Canada.”
Market rents have grown rapidly in North Richmond during the past three years, with strong demand for light industrial space, extremely limited options for tenants and a competitive atmosphere that includes multiple offers for most available spaces.
The average net rental rate in North Richmond increased more than 40 per cent from 2017 to 2019.
South Richmond has lagged behind due to the delayed George Massey Tunnel replacement and associated highway congestion. With no relief in sight for businesses located in South Richmond, PC Urban and KingSett believe demand will further increase for space in North Richmond.
PC Urban, KingSett partnership
In creating their partnership, PC Urban and KingSett are part of an emerging trend in the Metro Vancouver region, where local developers partner with institutional investors.
As noted in the CBRE 2020 Canada Market Outlook report, strong commercial real estate fundamentals attracted more investment capital to Vancouver in Q1 of 2020. CBRE is projecting that institutional investors, including Blackstone, Crestpoint and KingSett, will increasingly partner with local firms to gain a foothold in the market.
“Investors are still drawn to Vancouver in a big way and we’re seeing a growing number of institutional investors partnering with local operators in Vancouver,” said CBRE Vancouver managing director Jason Kiselbach, in the release.
“They’re looking at our fundamental lease rates and growth and buying as much as they can in office, industrial and multifamily, driving further construction of new projects.”