Metro Vancouver is the best hotel market in Canada, according to HVS International, but 2017 will see residential action shadowing both new hotel development and makeovers.
Downtown Vancouver’s Trump International Hotel & Tower, which is scheduled to open this year, has drawn headlines because of the sellout of its condominium component at prices of more than $1,200 per square foot.
Hong Kong-based Asia Standard International Group hopes to rezone the 357-room Empire Landmark in Vancouver’s West End, potentially converting the rooms to condos. A few blocks away, the Coast Plaza also intends to convert its 199 rooms to 316 rental apartments.
Meanwhile, hotel investors are facing a product shortage. The choice is building new or conversion, but both are tough calls.
“Assets would probably be close to fully priced, so we would be looking at options for how we can create value, redevelopment plays or repositions,” said Tyler MacDonald, hotels director for Oxford Properties Group.
Parq Holdings Ltd., a joint venture led by Paragon Development Ltd. and Dundee Corp., is going the redevelopment route with its Plaza of Nations casino site, building two new hotels that will add 517 rooms to downtown when they are completed this year.
Other hoteliers are competing head to head with homebuilders for sites, but Carrie Russell, managing director of valuation and advisory firm HVS Canada in Vancouver, said this can be expensive.
“Vancouver hotel developers literally have to compete with condo developers, and it just does not make very many deals economic.”
