Purchase of Kerrisdale apartment building part of bigger plan to buy at least 1,000 rental units in Vancouver, president says
Fiona Anderson
Sun
Grosvenor Capital Corp. is venturing into the Vancouver residential rental market as the next step in its ever-expanding portfolio of worldwide real estate investments.
The Vancouver-based company hopes that its purchase of the 67-suite Bermuda Manor apartment building in Vancouver‘s Kerrisdale neighbourhood for $12.9 million last week is just the first purchase of what will be the acquisition of at least 1,000 rental units in Vancouver, Dan Walsh, president of Grosvenor, said in an interview.
The company has already embarked on a similar acquisition plan in Seattle where it currently owns 300 rental units and is negotiating for more.
Grosvenor has also set its sights on other coastal cities in California.
The move into the rental market will provide the company with a steady cash flow to enable it to fund its other projects, Walsh said.
“A large part of our activity is investment properties where we require rental cash flow,” Walsh said. “So we are very active developers but we also need investment properties. It’s an adjunct to our development business.”
Grosvenor is currently involved in a number of development projects in various stages of planning in North Vancouver, Vancouver and Surrey that involve 2,000 residential units, but none of them rental.
However, the company is aiming to change that and is in discussions regarding a site on which it hopes to build a rental building, Walsh said. But where in the Greater Vancouver area that building may be, Walsh refuses to say.
“It would give it away,” Walsh said.
Grosvenor, which is part of Grosvenor Group Holdings Limited, a private international property company based out of England and started by the Duke of Westminster, branched out into the residential market from strictly industrial and office projects five years ago.
Initial forays were limited to developing and financing residential complexes that sold its units.
The purchase of the Kerrisdale apartment building and the buildings in Seattle, are the company’s first involvement with rentals.
The company moved into residential real estate because it felt the potential for residential was the best of all property types both in Vancouver and elsewhere in North America, Walsh said.
What made these cities especially attractive was their excellent population growth, which translates into a predictable rental market.
“And our timing has borne that out thus far,” Walsh said.
Demand for office space, on the other hand, Walsh said, is less strong than it was 10 or 20 years ago.
Helmut Pastrick, chief economist with Credit Union Central of B.C., agrees that the rental market in Kerrisdale is a good place to invest.
“The rental market particularly in Vancouver and Kerrisdale is solid.
“It’s typically been amongst the lowest vacancy rates in the region.
“Also the demographics in Kerrisdale is such that renters tend to be older than average, and that means a very stable rental market. So they have certainly chosen a very good market to get into.”
The company’s first investment in the area was the purchase of Annacis Island in 1953.
© The Vancouver Sun 2005