The largest shopping centre in the city of Vancouver outside of the downtown peninsula has been acquired by a locally-based real estate company.
Ivanhoe Cambridge has sold the 1959-built Oakridge Centre to QuadReal Property Group, ending its longtime ownership of the 575,000-square-foot indoor shopping mall. The amount was not disclosed, but it was likely in the billion dollar range given the location, proximity to SkyTrain, redevelopment potential, and the sheer size of the property at 28 acres.
For comparison, prior to Christmas, TransLink sold its 13.8-acre Oakridge bus depot, located two blocks west of Oakridge Centre, to a developer for $440 million.
“The opportunity to acquire a flagship retail property and development project of such quality is rare,” said Remco Daal, President of QuadReal’s Canadian real estate division, in a statement. “Retailers and their customers gravitate to the best locations and Oakridge, an urban gem at the hub of popular transportation and transit networks, perfectly fits this profile.”
In 2011, Ivanhoe Cambridge, which owns Metropolis at Metrotown and Guildford Town Centre, sold half its stake of Richmond Centre to competitor Cadillac Fairview. And just last week, Cadillac Fairview sold a 50% interest in its Vancouver portfolio, consisting of Pacific Centre shopping mall and a dozen office towers in downtown, to the Ontario Pension Board and the Workplace Safety and Insurance Board.
QuadReal Property Group was created last year by the British Columbia Investment Management Corporation to manage the pension fund’s $18-billion real estate portfolio. The company is also behind the redevelopment of the old Canada Post building in downtown Vancouver.
Vancouver City Council previously approved redevelopment plans for Oakridge Centre, submitted by Ivanhoe Cambridge and Westbank Projects Corporation, on two separate occasions.
The first plan approved in 2007 had a 2.586-million square foot footprint to grow retail to 950,000 square feet, office space to 326,000 square feet, residential to 1.25-million square feet, and build 60,000 square feet of amenities. There would be a mix of low-rise, mid-rise and high-rise towers reaching no more than 24 storeys.
Following the opening of the Canada Line, the proponents prepared a significantly more ambitious plan that was later approved by Council in 2014. The enhanced, revised plan had a footprint area of 4.57 million square feet, with 1.385 million square feet of retail, 424,300 square feet of office space, 70,000 square feet of amenities, and 2.761 million square feet of residential for 6,200 people. Much of the residential and office space would have been within 14 towers ranging between nine to 44 storeys.
As well, one of the most impressive highlights of the second plan was a nine-acre public park, to be operated by the Vancouver Park Board, where mall rooftop parking is currently located.
However, this $1.5-billion plan fell apart early last year when Ivanhoe Cambridge and Westbank announced they were being forced to downsize the project due to geotechnical constraints. A large aquifer under the mall was discovered, prompting the proponents at the time to cut the scale of the redevelopment by about 25% – from 4.6 million square feet to 3.5 million square feet.
In order to achieve the full scale and density of the project, a certain amount of parking had to be provided but this would require digging deeper into the aquifer – an underground layer of permeable rock that holds and transmits water – at a much higher cost. Such conditions are also difficult to build on.
QuadReal Property Group has indicated it is still interested in redeveloping Oakridge Centre and has retained Westbank as its redevelopment partner. However, under new ownership, the exact scale of the final redevelopment plan is unknown at this time.
“Along with QuadReal, we have an opportunity to bring to fruition a new standard in urban living about which we have long been passionate – a cultural hub that takes every element of a vibrant multicultural city and shares them with our community and millions of visitors a year,” said Ian Gillespie, Founder of Westbank. “We believe the future of Oakridge Centre will be even more dynamic than its past. We have few opportunities in life to create truly world-class projects – this will be one.”
Construction on the Oakridge Centre redevelopment was originally scheduled to begin in 2016 for a completion in 2024.
According to a December 2016 study by the Retail Council of Canada, Oakridge Centre with 150 shops and services is Canada’s second most productive shopping mall with sales of $1,537 per square foot. Toronto’s Yorkdale Shopping Centre topped the list with sales of $1,651 per square foot while Pacific Centre in downtown Vancouver came in at third place with $1,523 per square foot.