Market delays Hastings-Sunrise's Alba project

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      There are too many condos on the market today. Wynne Powell, president and CEO of London Drugs Ltd., offers this explanation as to why a long-planned development in East Vancouver—to be anchored by a new branch of the large-format drugstore—is now on hold.

      “We want to start constructing that in a market that hasn’t got as many condos on the market as it currently does,” Powell told the Georgia Straight in a phone interview.

      He noted that money isn’t the problem. After all, the developer—Hastings Sunrise Development Limited—is a subsidiary of H. Y. Louie Co. Ltd., one of the biggest firms in B.C. And it’s the same company that owns the London Drugs chain.

      “There’s no financial trouble with us,” Powell said. “This is not a question of we don’t have the dollars to do it—we could easily develop it. It’s just a prudent decision of when you want to bring something to market.”

      The mixed residential and commercial project, called Alba, is on the north side of the 2500 block of East Hastings Street between Kamloops and Penticton streets. It’s a four-storey development with 108 one- and two-storey condos. A new and bigger London Drugs and other commercial establishments will occupy the ground level. A well-established branch of London Drugs is currently located in the same block.

      According to Powell, the initial response from condo buyers was encouraging. However, presales later slowed. “Not just in this project,” Powell said. “But as the markets became more challenging, people have been less inclined to do presale opportunities.”

      Powell indicated that in previous condo projects involving London Drugs as an anchor establishment, the apartments were sold out before construction. With respect to Alba, he said, the developer had a 60-percent presales target. According to Powell, the market “isn’t supporting that percentage at the moment”.

      According to information provided, there are two completed condo developments in Vancouver anchored by London Drugs stores: the Vine in Kitsilano and Kerrisdale Station.

      As with other types of homes, sales of condos have been below average, based on figures released by the Real Estate Board of Greater Vancouver on May 2. In April of this year, 1,052 apartments were sold. According to the REBGV, that’s an 11.6-percent decline compared to the 1,190 sales in April 2012, and it’s a decrease of 12.4 percent compared to the 1,201 sales in April 2011.

      The board also reported that the benchmark price of an apartment dropped 2.6 percent from April 2012, to $365,900.

      Soon, many more condos will be on the market. On May 8, the Canada Mortgage and Housing Corporation reported that construction began on 1,181 apartments and other attached properties in Metro Vancouver in April.

      Advertising material covers the fence around the site of the postponed Alba development. One section extols the Hastings Sunrise neighbourhood for its “small town while still metropolitan” allure. Another says, in part, that the area is “such a neat little spot”. More than a half-dozen retail outlets were demolished last year in preparation for the now-idle construction site.

      “We’re open during construction,” proclaims a sign outside the current London Drugs. Another sign nearby points to the company’s presales centre about a half-block east.

      Powell doesn’t know when the project will resume. “The market will determine that,” he said, “not us.”

      For now, according to him, maintenance work is being done at the current London Drugs store, which opened its doors to the community on May 8, 1973. When construction begins, the store’s operations will move to a nearby temporary location while its modern replacement is being put up.

      “Hastings Street is going through a tremendous renewal and regeneration,” Powell said. “That’s what we want to participate in. We’ve been there 40 years. We understand this neighbourhood.”

      In the meantime, the community “will benefit at this point from a little bit of a rest to give the market a chance to mature a little bit”. Powell stressed, “This is strictly what we feel to be a prudent business decision.”



      Johnny Seeds

      May 15, 2013 at 9:34pm

      Good riddance to this eye sore of an idea. Build a community centre or a park or a community garden not just a giant London Drugs and some condos.

      Martin Dunphy

      May 15, 2013 at 9:39pm

      Makes you wonder if they did their due diligence in advance regarding market conditions, etcetera.
      Do developments have to have zero risk now before the soil gets turned?
      If they decide to wait two, three, or 10 years now before they build, that bombed-out, ugly amputation and giant fence that destroys the look of the block and neighbourhood will define what used to be a pleasant stretch of small businesses and shops.
      Good planning. Do you live in that neighbourhood, Mr. Powell?
      Doubt it.

      east side

      May 15, 2013 at 10:12pm

      Good thing they knocked a big hole in the neighbourhood before they decided to put the project on hold. And the idiots at the city allow this...on the eastside only. Morons!

      Proud Hastings Sunrise Resident

      May 15, 2013 at 11:33pm

      So what's going to happen to the empty lot now? An ugly 1/2 block scar now blights a great neighborhood! Is the London Drugs/the developer going to fix this or are they trying to run the neighbourhood into the ground to justify their development at a later time? Shame!


      May 16, 2013 at 11:12am

      Actually a pretty smart decision. Cancel this before they start .....very prudent business move. The worse of the two would be to build it out and then have the developer slash prices drastically to move the unsold inventory. That situation would quickly reduce property values in the area and totally screw original investors. The writing is on the wall ..... full blown crash coming. Most other developers would deny deny deny until it becomes obvious and buyers close on their homes. After that its major reductions, devastating values original buyers paid. WHY anyone buys presale in this market, I don't know. Wait, that's right no one in Vancouver does .... Foreign investors from China sure do though its inrained in the culture.

      Alan Layton

      May 16, 2013 at 12:28pm

      In other words their greed blinded them so much that they couldn't see the forest of cranes building condos to the west.

      anonymous 2

      May 16, 2013 at 8:34pm

      The project was not successful not because of the market but poor unit layout and poor marketing. This is what happens when you have a Drug Store try to become a Developer. Most seasoned Developers would not have proceeded the way these people did, nothing to do with the market.


      May 25, 2013 at 8:52am

      This is a new reality people. Very few saw this coming except me and a handful of others. You (the general public) are completely oblivious to the carnage coming in real estate. The canary's are starting to drop to the bottom of the cage while everyone keeps denying that there is a problem. An average income in Vancouver may never be able to buy an average home but the disparity will narrow trust me. You will see a new London Drugs store in that location (years from now) but you will not see condos...the long painful grind down has begun. I can't wait to see peoples faces about 3 years from now.

      Anonymous 3

      May 29, 2013 at 1:48pm

      Agree 100% with anonymous 2 above. This was not a failure of the market, but a failure of a part-time hobby developer who really don't know what they're doing when it comes to real estate. Their Kerrisdale Station project mentioned in the article was a complete debacle back in the 90s as well and they obviously haven't learned anything in the intervening 15 years. The Vine on Broadway was successful but was not developed by London Drugs.


      Jun 20, 2014 at 5:20pm

      on the upside, the current whole in the block has been turned into a temporary community garden.