An Affordable High

Surrey skyline | BCBusiness
Surrey has planned for highrises since 1990, though of 49 approved major development projects, 21 are currently on hold.

As developers bank on demographics and cheap land, Surrey gets a skyline

Given its history as Canada’s car-theft capital and its reputation for trailer parks and country miles of sprawl, it’s downright surreal for some to imagine Surrey’s Whalley area as the next Yaletown. But nearly two decades after SkyTrain came to Surrey’s downtown, developers are hoping to redefine the area’s “affordability” from a euphemism to a selling point. Whalley has crept into the crosshairs of Concord Pacific, Bosa Properties and Century Group, developers who built skylines in Vancouver, Burnaby and Richmond and have another one planned and under construction that will add 40—that’s right, four-zero—highrises that will more than double the population of Surrey’s downtown core to 65,000. If the Expo Line’s 1994 expansion failed to attract developers, then this year Surrey is finally looking right into a condo boom.

Fifty storeys above King George Boulevard, the $1.3-million penthouse at the planned Three Civic Plaza is the most expensive apartment south of the Fraser. The construction of Century Group’s $150-million hotel- residential complex, which at 52 floors will be the tallest building between Vancouver and Calgary, is contingent upon healthy pre-sales, which began in May with one-bedrooms starting in the low $200,000s. Concord Pacific completed two 36-storey towers in 2012 and is selling units in phase one of Park Avenue, a 41-storey tower that will eventually be twinned with another 40-storey tower. One-bedrooms in Park Avenue started at a mouth-watering $182,900. Farther afield, Concord Pacific—its investment in the area to date at just below $750 million—has proposed two towers between 35 and 39 storeys.

Bosa Properties, the developer behind Burnaby’s Highgate Village and much of the Coquitlam Centre skyline, has plans for six towers. The company began acquiring property along the north side of 104 Avenue in 2011, making it a relative late-comer to Surrey. “We’re gearing our products towards first-time buyers,” says Colin Bosa, CEO of Bosa Properties, who plans to price units in its first offering from $250,000 to $275,000. “Affordability drives our product positioning,” he says.

It’s affordability that drew developers to Surrey in the first place. Surrey has the most inexpensive rapid-transit-adjacent land in Metro Vancouver, says Bosa. According to Colliers International, the average price per square foot on residential land deals ranges from $190 to $250 per buildable square foot in downtown Vancouver. That dips to between $85 and $140 in Metrotown and $60 to $65 in Coquitlam. In Surrey City Centre, residential land deals average out at between $16 and $35 per square foot. The low cost of land is reflected in the price tempting buyers. Finished condominiums average at $450 per square foot compared to $800 in downtown Vancouver, says Bosa.

Surrey city council has also made the city an attractive location for local developers, says Michael Ferreira, managing principal at Urban Analytics Inc. The six-square-kilometre area around the King George SkyTrain station has seen $1.1 billion in public-sector investment, and Mayor Dianne Watts has lobbied hard to expand rapid transit down King George Boulevard. Developers have partnered with Surrey City Development Corporation (SCDC), a city-owned and operated land developer, unique in the Lower Mainland, which purchases and bundles land for future development and forms joint ventures with private developers. According to Ferreira, the SCDC’s financial comment to joint- venture contracts reduces the risk from project flops for private-sector developers, demonstrating the municipal government’s confidence within the neighbourhoods it administers. But the city needs to court residents if it wants to make City Centre a success, says Ferreira. “Projects like Weststone Group’s Ultra and Concord Pacific’s Park Place originally targeted investor buyers, but moving forward, developers recognize the need to make the neighbourhood sustainable,” says Ferreira, and that means bringing jobs and office space to Surrey. The city has made strides since 2010, convincing employers to relocate, and hopes to double the amount of commercial space in City Centre from 10 million to 20 million square feet, which includes a new Coast Capital Savings headquarters and City Hall complex. By 2031 Surrey estimates to have 39,000 workers in the downtown core, up from 17,500 in 2013.

Surrey has planned for highrises since the Expo Line crossed the Fraser in 1990. As early as 1985, 104 Avenue was marked as a corridor for rapid transit east to Guildford Town Centre. King George Developments planned towers along 100 Avenue in the late 1980s in anticipation of the 1994 arrival of SkyTrain to King George, but the plans never materialized. Even the land rush of the mid-2000s was put on ice by the 2008 recession.

Of the 49 major projects that Surrey has approved for City Centre, 21 are on hold. Century Group put its three-tower Holland Pointe project, which included a 29-storey, a 36-storey and a 41-storey apartment building, on hold in 2008. King George Developments has a 46-storey tower, permitted in 2011, on hold. Seagate Properties applied for permits on a 37-storey and 30-storey building in 2006; neither made it past the servicing agreement stage.

Surrey’s City Centre is still a long way from turning a great deal into a great neighbourhood, but the growth is already there: according to Statistics Canada, between 2006 and 2011 Surrey saw an 18.6 per cent hike in its population, compared to 4.4 per cent in Vancouver. By 2040, the City of Surrey projects that one in five metro residents will be living in Surrey. As Vancouver becomes less affordable, shunning prospective condo buyers in search of a new build and urban lifestyle, Surrey might just be the best deal going.