Property Biz Canada
Location and price key for developers dealing with soft market
Property Biz Canada
Wed Jan 09 2013
Demand in the real estate market will remain strong despite weakened sales, but developers have to come into the 2013 market with the right price point and location, said David Podmore, chairman and chief executive officer of Concert Properties Ltd.
Podmore was the December guest speaker at NAIOP Vancouver’s breakfast session, that saw more than 250 members turned up to hear the industry icon speak about markets and his 33 year career in property development.
“What has happened in the condominium market is that we have all built on the higher end of the market,” he said, adding that works only “when the market is robust and it is strong enough to absorb these units.”
Concert, he said, has since cast around to “identify where the opportunity” now exists and today that means offering a more affordable product in terms of rentals or sales units and providing a diverse supply of locations.
“The market will still remain strong – but you have to have the right product,” he said.
Concert plans to add 4,000 units in coming years
Concert has proposed 4,000 units coming on stream in the six to 12 years, he said. The company, founded in 1989, specializes in developing rental apartments, condominium homes, and retirement communities as well as developing commercial and industrial properties and infrastructure projects. It also handles property management. Concert has operations in B.C., Alberta, and Ontario with financial backing from union and management pension funds.
The diversified company has assets in excess of $1.6 billion and shareholder equity of approximately $800 million. It has developed some 10,000 condominiums and rental units.
Podmore called 2012 a good year for Concert as it prompted a “large pipeline of new projects coming on stream in the next 12-18 months.” The company also made some successful acquisitions of new prospects while the rental and seniors market remains strong, Podmore said.
Concert has received approval for a number of project starts in 2014 and has three major contracts worth $1.4 billion and three or four in the proposal stage.
Preparing to develop North Vancouver's waterfront
Podmore said Concert acquired a large portion of real estate on the City of North Vancouver’s waterfront for its proposed Harbourside Waterfront development. “We have an exciting development in North Vancouver,” he said.
Concert has applied for rezoning on four blocks of land near its Harbourside Business Park. It is a proposed a mixed-use development along the Harbourside waterfront, in the West End of the city (on the south side of Harbourside Drive). The project includes a ground floor of commercial with retail and office uses and three to seven storeys of residential above, states Concert’s rezoning proposal. There will be five residential buildings with a sixth used for rentals or by seniors.
Image of industrial land acquired by Concert Properties in North Vancouver on the left and a sketch of a section of the property as a proposed mixed use development on the right which if approved by the city would become the Harbourside Waterfront development.
“We have also acquire a large site in Coquitlam on the Evergreen Line,” he told the NAIOP members at the session, adding that Concert also has similar proposals either under development or going through the approval process in Toronto.
The Evergreen Line, a new rapid transit line, will start construction in 2013 linking areas of Coquitlam and Port Moody to the Lougheed Town Centre’s Millennium Line and serve as a feeder to Vancouver’s Broadway station, which is now being expanded. The area known as Lincoln Station, near Coquitlam Centre shopping mall, is undergoing high-rise development as the city is looking to develop a nucleus.
Alberta to lead growth in Western Canada
Podmore, queried by moderator and Premise Properties president Avtar Bains as to where he sees the future market potential, said to look to Alberta to lead the growth in Western Canada.
“If I was setting out on my own, I would make a serious effort to be in the North," he added.
The Yukon, Northwest Territories plus northern B.C. and Alberta all have tremendous potential for developers, Podmore believes. “It is just a matter of time,” he said, as the world demand for more resources spurs new developments that will bring in more people. Developers will need to go into these areas to make it work, he said.
“There is little awareness of the north,” he said. Developers will not be able to capitalize on the north’s development from offices located in the urban areas. Developers need to be located in these areas to “understand the North,” he said.
“There will be a limited number who will make the effort,” he said. There will not be a ready pool of information available on which to make decisions and those going in will need to be self-directed. “You will have to make your own assessment,” he said.
As for the key to Podmore’s successful career?
He told the audience his success was never passing up an opportunity. He tells how several were presented to him leading to large projects, (which he favours) and bringing into contact with some of the most well known names in the industry.
When BC Place chair Alvin Narod invited him to Vancouver for a job interview as chief planner starting almost immediately, Podmore, who was working in Alberta, could have procrastinated. “I could have said – I will get back to you. But Alvin was known to be a pretty impatient guy and by then, the opportunity would have been gone. You also have to recognize where that opportunity might lead,” he said.