ICBC Sells Central City
Thursday August 2, 2007
Policyholders benefit from development’s turnaround
Effective August 1, 2007, ownership of the Central City development in Surrey, British Columbia, Canada transfers from the Insurance Corporation of B.C. (ICBC) to Blackwood Partners Inc. on behalf of a consortium of Canadian pension funds, who paid $245.75 million for the properties.
Central City was owned by Surrey Central City Mall Ltd., a wholly-owned subsidiary of ICBC. The development includes an office tower, atrium complex, shopping mall and adjacent land. In recent years, ICBC has said that the size of the Central City development meant that it was not appropriate for the company’s investment portfolio. During that time, attention has been focused on leasing the space and getting the development ready for sale.
The development is situated in Surrey, B.C., one of Canada’s fastest growing cities, and is one of the largest complexes of its type in the Greater Vancouver area.
The components of the Central City project that have been sold include 570,000 square feet of office tower and podium space, and 490,000 square feet of retail mall space. Simon Fraser University continues to own 305,000 square feet in the tower and podium.
The property was acquired in 1999, and the office tower and podium/galleria were completed in 2003. The retail mall was originally built in the 1970s and was refurbished and expanded in the 1980s and 1990s.
The complex is a high-quality building. Central City was the winner of Le Marche International des Professionnels de l’Immoblier (MIPIM) International Property Market’s 2004 Special Jury Award as the world’s best overall new development for its combination of stunning architecture and building innovation.
The office tower and podium are primarily occupied by large tenants with long-term leases. The retail mall includes a number of major retailers, also with long-term leases.
PricewaterhouseCoopers was retained by ICBC to review the sale of Central City. Their report concluded that there was an effective sale process conducted by a reputable broker.
The investment in Central City was part of the ICBC’s investment portfolio, and proceeds from the sale will be reinvested. Investment income helps keeps ICBC’s rates low and stable.