Kwoks take on huge Vancouver project

PUBLISHED : Wednesday, 05 May, 2010, 12:00am
UPDATED : Wednesday, 05 May, 2010, 12:00am

Aspac Developments, a private company held by the Kwok family, the controlling shareholders of Sun Hung Kai Properties, is undertaking a major redevelopment project in Vancouver, Canada

The River Green project, which will take up to 15 years to complete, is set to transform the old Coal Harbour in Richmond, located on a tributary of the Fraser River within the metropolitan sprawl of Vancouver. The area, previously a railway yard and docklands, will be redeveloped into luxury flats and office towers.

Richmond, on the Fraser River delta, is home to about 79,000 Chinese Canadians, about 45 per cent of the Chinese population in the country, according to a 2006 census.

Aspac has bought the development site and is planning to build three million square feet of residential and commercial property comprising about 2,600 units.

According to an official from Magnum Projects, the property's marketer, the first phase of 458 units, ranging from 700 sqft to 4,000 sqft penthouse flats, will be offered in six buildings this month.

James Wong, an estate agent specialising in Richmond properties, said prices of older homes in the area averaged between C$700,000 (HK$5.35 million) and C$900,000, while new homes ranged from C$1.5 million to C$2 million.

'There are a lot of old or second-generation or older immigrants that are already here and over the years have good equity in their home. They may buy either for investment or for their children.'

He added that unlike the United States, where it was difficult for non-residents to get a loan, Canada was different.

'Here, the banks can do up to 65 per cent financing, whether you are a resident or non-resident. That makes a big difference because people can use some leverage and that provides liquidity for people to invest in real estate,' Wong said.

Prices have not been released for units in the new development but they are likely to be expensive as Vancouver property has soared in the past 12 months.

According to the MLSLink Housing Price Index covering all of greater Vancouver, the average price for all properties was C$584,435 in March, up 20.3 per cent from a year earlier and 2.8 per cent above the previous high in May 2008.

The benchmark is misleading, however, as the average price for a detached home on Vancouver's west side was C$1.6 million in March, up 38.5 per cent from a year earlier. In east Vancouver, the average was C$734,300.

Aspac paid a reported C$141 million to buy 11 hectares of waterfront land featuring dramatic views of the mountains, ocean and Vancouver Island.

In turn, the city used the money to create its C$178 million Richmond Olympic Oval, the site of the speed skating at Vancouver's recent Winter Olympics.

In its post-Games incarnation, the centre will be transformed into a fitness facility for the public and the development of top athletes.

Looking over the model of River Green in Aspac's C$9 million showroom to promote the project, Xi Yueli, an immigrant from Xiamen, said she had no doubt the project would be popular with Chinese.

'Chinese like Richmond. It's central to the city, lots of good restaurants and shopping here, and you can walk around without getting lost.'

Bob Rennie, Vancouver's 'condo king', said Asian investors accounted for about 25 per cent of his market.

'With the amount of money being made in China and with the acceptance of China to Vancouver, we have to be in the top two places on the planet for China to look at, to move money to.'

Rennie forecast Vancouver property prices would 'very safely' rise between 4 per cent and 4.5 per cent this year.

Long-term investment

The first phase of 458 units will be offered in six buildings

The number of years estimated to take to complete the River Green project: 15