Strawberry Hill Shopping Centre in Surrey sold for $155 million

Strawberry Hill Shopping Centre in Surrey. (CBRE Vancouver)

One of the South of Fraser sub-region’s largest suburban-style shopping malls has changed hands in a deal worth $155 million.

It was announced today by commercial real estate firm CBRE Vancouver that it has sold Strawberry Hill Shopping Centre at 12101 72nd Avenue and 7350 120th Street in Surrey for its major high-density, mixed-use redevelopment potential.

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The deal to sell the property to Strawberry Hill Shopping Centre Holdings was reached in December 2023. This ends RioCan Real Estate Investment Trust’s ownership of the property, which first began in 2002 when RioCan entered into a joint partnership with Kimco Realty Corporation to acquire several shopping malls across the country.

Then in 2015, RioCan and Kimco ended their 15-year partnership, with RioCan acquiring the full stake in several shopping mall properties across Canada, including Strawberry Hill Shopping Centre.

strawberry hill shopping centre surrey f

Strawberry Hill Shopping Centre in Surrey. (CBRE Vancouver)

Located at the northeast corner of the intersection of Scott Road and 72nd Avenue, Strawberry Hill Shopping Centre spans 35 acres, with the majority of the property currently used as surface vehicle parking. The mall, built in the 1990s, has about 340,000 sq ft of building floor area, and features anchor tenants such as Cineplex, Sport Chek, The Home Depot, Winners, HomeSense, and Pet Smart. There are about 35 businesses on the property.

According to BC Assessment, as of July 2023, the two parcels that make up the mall carry a combined assessed value of about $187 million, with approximately $186 million coming from the land value and just over $1 million from the value of the structures. This includes the land Scottsdale bus exchange sits on, which is part of mall property.

Over the years, RioCan previously indicated to the City of Surrey, on several occasions, its interest in redeveloping the mall, which was a strategy that reached the initial planning phases but required more comprehensive planning, including site rezoning.

The recent sale was spurred by the growing redevelopment potential of the mall, with both Delta and Surrey’s municipal governments eyeing densification along the Scott Road corridor, including the City of Surrey’s current densification planning process for its side of the Scott Road corridor, which is expected to enter the detailed planning process early this year towards the creation of an area plan.

Strawberry Hill Shopping Centre in Surrey. (Google Maps)

Additionally, the mall is a provincially legislated transit-oriented development (TOD) site, as TransLink’s Scottsdale bus exchange immediately to the north of the mall is designated by the provincial government as a TOD bus exchange.

However, the full development potential of the north side of the mall — closest to the bus exchange — is currently challenged by BC Hydro’s west-east high-powered transmission lines crossing above the surface parking lot next to Home Depot. These utilities may have to be relocated to optimize the site’s redevelopment potential.

At the start of January 2024, TransLink launched the new R6 RapidBus service along Scott Road and 72nd Avenue, running between SkyTrain Scott Road Station and Newton bus exchange.

This RapidBus service — with some of TransLink’s most extensive bus priority measures for road design changes to date — is seen as a precursor to a potential Bus Rapid Transit (BRT) or rail-based rapid transit upgrade in the future, which would further solidify the corridor’s development potential.

“While the property features significant holding income from national and local tenants, there is large potential for long-term phased development to bolster the city’s plans for future densification in the area. These plans include the creation of much-needed residential and rental housing adjacent to the city’s major transit hub,” said Yashar Khalighi, vice president of CBRE Vancouver, in a statement.

“With transactions like these taking place amidst Canada’s turbulent market conditions, I am convinced that investor confidence in BC’s commercial real estate sector remains high. In times like these where we are still faced with scarcity of land, we are seeing how future development potential can outweigh the cost of borrowing even at today’s rates.”

This continues the growing trend in BC of major shopping malls — especially suburban-style malls adjacent to major public transit services — being eyed for their mixed-use redevelopment potential.

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