A Magnet for Global Investment

From downtown office towers to Fraser Valley industrial parks, the Lower Mainland economy is firing on all cylinders

LOWER MAINLAND/SOUTHWEST

? Abbotsford

? Burnaby

? Chilliwack

? Coquitlam

? Delta

? Gibsons

? Hope

? Langley

? Lillooet

? Maple Ridge

? Mission

? New Westminster

? North Vancouver

? Pitt Meadows

? Port Moody

? Richmond

? Sechelt

? Squamish

? Surrey

? Vancouver

? West Vancouver

? Whistler

You’re never very far from wilderness anywhere in British Columbia, even in the province’s urban southwestern corner. And here, too, you can find head offices and operations of the traditional resource and transportation industries that helped build the prosperous province we have today.

What sets the Lower Mainland apart, though, is the degree to which it has generated economic momentum seemingly all its own in industries as diverse as alternative energy, life sciences, fashion design and visual effects.

The information technology sector, to take just one example, has been on a tear for more than a decade. Real estate advisory firm CBRE Group recently ranked Metro Vancouver the 12th-largest IT cluster in North America, having seen a net gain of 22,300 tech workers between 2013 and 2018. American IT companies DataCloud International, Grammarly, Quora, Tigera, Tile and Tipalti announced office openings in the city over the past year. In January, Mastercard announced it would create a cyber-security development centre in the city, dedicated to curtailing hacking in the payments sector and creating around 300 new jobs. Incumbent players Apple, Microsoft Corp., Shopify and Slack Technologies have all signed leases to expand their footprints downtown.

Many of these companies cite abundant technical talent, competitive labour costs and accommodating immigration policies as reasons for locating north of the border. Quora
co-founder and CEO Adam D’Angelo had this to say about the choice of Vancouver for a new office focusing on machine learning to support its question-and-answer platform:

“We looked at many possible locations for this office, and decided on Vancouver for three reasons: First, our success as a company depends on our ability to hire the best engineers from around the world, and Canada’s strong immigration program will let us do that. Second, it is important to be in a location where highly skilled technical people want to live. Vancouver is regularly rated as one of the cities with the highest quality of life in the world, and our research has confirmed this preference among the engineers we’re hiring. Finally, Quora is a tightly integrated product, so coordination in product development is extremely important to us Vancouver is in the same time zone as our Mountain View headquarters and just a short flight away.”

Office space needed

Amazon.com, meanwhile, has reportedly tripled the space it intends to lease in the redevelopment of the former main post office downtown, to 1.1 million square feet—enough to accommodate up to 10,000 employees. The lease agreement would make Amazon the largest single occupant in downtown Vancouver.

The electronic gaming subsector is buoyant, too, with local developers Relic Entertainment and Kabam both moving into spacious new offices with capacity for 300-plus employees. A report from the Entertainment Software Association of Canada put the number of local jobs in the industry at 7,300—up 1,400 in just two years.

Homegrown startups, meanwhile, have garnered some unprecedented sums of venture capital. Burnaby-based Themis Solutions, better known by its brand name, Clio, set a record for the largest VC investment in Canadian history last year with a $333-million raise. The money will go into expanding the distribution of its software solution for law firms. Alternative energy startup General Fusion raised about $135 million between equity investments and a contribution from the federal Strategic Innovation Fund in its effort to build a working nuclear fusion reactor. Trulioo Information Services, Terramera and ToursByLocals all raised money in the tens of millions.

Partly due to the growth of the technology sector, Metro Vancouver’s market for office space is witnessing a cyclical low in vacancy. Relief is in sight, though: there are 26 projects comprising nearly five million square feet of space under construction, according to a report released last August by data provider CoStar Group.

The technology frenzy isn’t all downtown, either. With funding from the provincial government and participation from post-secondary and corporate partners, a new Quantum Algorithms Institute is rising at SFU’s Surrey campus. The institute will help train graduate students in the emerging field of quantum computing, supporting the research of companies such as local quantum software developer 1QB Information Technologies (1QBit).

It’s easy to forget, amid this knowledge-industry growth, that Metro Vancouver was built around its port. But expansion there is also proceeding as Canada’s trade continues to pivot toward the fast-growing economies of the Pacific Rim. Last year, GCT Global Container Terminals announced a $160-million investment that will boost the Vancouver Harbour terminal’s container-handling capacity by 25 percent, to a million 20-foot equivalent units (TEUs) per year. Meanwhile, the federal government earmarked $102 million in funding from the National Trade Corridors Fund to improve intermodal facilities and road and rail connections for freight around the metropolitan region.

New projects

A number of regional transportation improvements are also afoot, including the $1.4-billion replacement of the Pattullo Bridge between Surrey and New Westminster, the addition of new lanes and on-ramps on Highway 1 in North Vancouver and Langley and the $2.8-billion extension of the Millennium SkyTrain line west along Broadway to Arbutus Street in Vancouver. Municipal politicians have reached agreement on SkyTrain extensions to UBC in the west and Langley in the east.

Stepping out of the shadow of Vancouver International Airport, the Fraser Valley’s aviation hub, Abbotsford International, tallied more than one million passengers in 2019, having more than doubled its traffic in just four years.

The long-expected move of St. Paul’s Hospital to a $1.9-billion campus on the False Creek Flats proceeds apace, with the City of Vancouver approving Providence Health Care’s rezoning application for the 18-acre site in November. Further, the provincial government announced in December that it would build an entirely new hospital in the Surrey neighbourhood of Cloverdale in response to the population growth in the area.

The film and television production industry is growing outward from its urban base. Not only are suburban municipalities like the Tri-Cities seeing a surge in location shoots; in September, Martini Film Studios announced plans to build a 600,000-square-foot studio in Langley, which will be the largest dedicated film facility in Canada.

Outlying communities in the Fraser Valley and Sea to Sky Corridor are likewise attracting advanced manufacturing. Last September Molson Coors opened the latest and most efficient of its 29 breweries around the world in Chilliwack. Compared to the Vancouver brewery it replaced, the facility operates using 20 percent less energy and 40 percent less water and includes a state-of-the-art CO2 recovery system.

Already home to atmospheric remediation company Carbon Engineering, Squamish continues to lure cleantech companies—the latest being Nexii Building Solutions, a manufacturer of modular buildings using a proprietary material, Nexiite, that is far less carbon-intensive than traditional building components.

Housing the newcomers

After a pullback in 2018, the Lower Mainland real estate market righted itself in 2019—in fact, Surrey, the region’s second most populous and fastest-growing municipality, blew through past records for building permits to reach a new high of $2.29 billion.

Plans for major housing projects abound. The former Oakridge Transit Centre in Vancouver will feature more than 1,600 new homes in 17 buildings ranging up to 23 storeys. Westbank Corp. is redeveloping nearby Oakridge Centre mall into a highrise mixed-use retail and residential complex.

The Squamish Nation has unveiled a plan for 6,000 homes to be developed on its land at the south end of the Burrard Bridge in Vancouver in partnership with Westbank. The community, named Se?á?w, would be primarily for rent, answering a dire need for rental properties in the region. The Squamish Nation also intends to build 1,000 homes for its own members on reserve land on the North Shore.

In Langley, Vesta Properties has begun work on Latimer Heights, a $1-billion master-planned community of some 2,000 homes and a retail village on 74 acres. Algra Bros. is moving forward with an ambitious plan to redevelop four acres of restaurant, retail, office and residential space in Chilliwack’s city centre.

“With a strong economy and population growth, Vancouver remains a desirable place to live that will eventually draw buyers back into the market,” states a recent report from PricewaterhouseCoopers and the Urban Land Institute. The report gives Metro Vancouver the best real estate outlook in Canada for 2020.