A major international gold mining company has taken three upper floors of one of Vancouver’s next office towers. GWL Realty Advisors (GWLRA) announced Vancouver-based B2Gold Corp., will lease 37,000 square feet at the 33-storey, 371,000-square-foot, downtown Vancouver Centre II building under construction at 753 Seymour St.
The deal brings the total lease-up of the building to nearly 40 per cent, in a market experiencing record-low vacancy with no new office product set for delivery until 2020 at the earliest. B2Gold will take floors 27, 28 and 29 (See Editor’s Note below).
It’s the second major deal announced for the tower GWLRA is developing for owners Healthcare of Ontario Pension Plan (HOOPP), GWL Real Estate Fund and the London Life Real Estate Fund. The tower will be built to LEED Platinum specifications and will target Well Building certification.
Headquartered in Vancouver, B2Gold operates five gold mines and several exploration and development projects in Nicaragua, the Philippines, Namibia, Mali, Burkina Faso, Colombia and other countries.
The company’s head office is currently located at 595 Burrard St. in one of the Bentall Centre towers.
GWLRA seeks diverse set of tenants
GWLRA’s Geoff Hue said he’s not surprised to sign a mining tenant even though the downtown office market is increasingly dominated by tech companies.
“We’re out there talking to tenants from all sectors and there are not a lot of choices for brand new office space of this scale and profile, and I think the timing was right for us and B2Gold,” said Heu, GWLRA’s vice-president of development for Western Canada.
The deal follows the November announcement that local video game-maker Kabam had taken the bottom seven floors and 105,000 square feet of the tower. The development is part of the Vancouver Centre complex — also home to the 1976-built Scotia Tower and Vancouver Centre Mall.
“It’s nice to have diversification in the building,” Heu said. “That’s always a positive. We’ve got the bottom leased to Kabam and the top leased to a resource company. That type of diversification we see as very favourable and now we’re almost 40 per cent leased.”
He said excavation at the site is complete and the construction crane has now been put up. The building is on track to complete in 2021, which will make it among the first office towers to open in the next wave of downtown office development, depending on construction schedules.
B2Gold declined a request for comment.
Tech drives downtown office market
Once driven by natural resource and professional services firms, Vancouver’s downtown office buildings now house mostly tech companies and co-working space, with the percentage of traditional professional services firms remaining relatively constant.
Overall, access to office space in Vancouver remains extremely tight. The downtown office vacancy dropped to 2.7 per cent in the first quarter of 2019, according to data from CBRE.
This deal, while notable, doesn’t necessarily mean mining tenants are making a comeback, said Bart Corbett, an office leasing specialist and executive vice-president with Cushman and Wakefield in Vancouver.
“We’re not seeing a movement of major mining firms in our market,” he said. “(But) there has been consolidation.”
He said demand for office space from mining firms likely peaked in the 1980s and early ’90s, with demand surging again in the early 2000s.
Tech firms today account for 48.5 per cent of downtown office tenants, according to data provided by Corbett’s firm. Mining demand wouldn’t rate in the Top 10.
“On the resource side, you have also the engineering firms who support that resource sector,” he said. “They’re service firms related to the mining industry that are designing or building mines or LNG projects, outside of Vancouver of course.”
There appears to be some growth in that sector, but there are also mixed signals.
“Those engineering firms are really project-based and they do ebb and flow with the mining industry,” Corbett said.
EDITOR’S NOTE: This story was edited shortly after publishing to correct the floors being leased by B2Gold. The firm is leasing floors 27, 28, 29, not the top three floors as originally stated. The error was due to incorrect information provided to RENX. We apologize for the error.