(Posted on Oct 30, 2016 at 01:00PM by Michelle Bogle)
According to a recent industry report, Kelowna is becoming a desirable alternative to the Lower Mainland for Asian investors looking to avoid the 15% foreign buyer tax and cash in on higher capitalization rates. Over the last 18 months, specifically, the area has seen a spike in Asian investment, including multi-family, winery and golf course assets.
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There are a handful of notable transactions, including the former Monaco multi-family site, which sold for $6.5 million, and the Lake Okanagan Resort sale, a 300-acre property purchased for over $10 million. Asian investors also purchased 25% of the 172 suites sold at the unveiling of Cambridge House Kelowna, a condominium development in the city’s downtown core.
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As a result, Kelowna is currently experiencing a compression on capitalization rates as Asian buyers begin to outbid local investors; however, these cap rates are still much higher and more desirable than that of Vancouver.Â
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As well, there has been an overall decrease in office, industrial, retail and rental property vacancy rates from 2014 to 2015. Tenants are now signing longer lease terms, averaging between five to ten years versus the previous average of three to five years – a definite sign of market assurance.
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Foreign investment continues to be a hot topic across the province of British Columbia. For more insight, please feel free to contact our Vancouver office to speak with an associate.