Retail centres account for all five of the most expensive commercial real estate in Victoria, according to BC Assessments, but local realtors say the assessed values are likely far less than their true market value in the capital regional district (CRD).
The assessments show all but three of the 10 most valuable commercial properties have increased in value compared with last year.
The list was topped once again by Uptown. The massive shopping centre in Saanich was assessed at $282 million, up from $239 million the year before, setting it well ahead of its closest rival. Mayfair Shopping Centre was a distant second at $185 million, up from $179 million the previous year.
Shopping centres again made up most of the top 10 with Hillside Centre assessed at $135 million, up from $127 million, and Tillicum Centre at $102.8 million, up from $97 million.
The top five on the list was rounded out by the Fairmont Empress Hotel, which was assessed at $90.5 million, down from $106 million last year.
Commercial real estate agents and brokers, however, appear to be united in their belief the assessed value of these properties has little relevance to the marketplace.
"We find little correlation between the assessed and actual market values for commercial real estate in the CRD," said Mark Litwin, senior broker with Victoria Commercial Properties.
"There are a number of ways to value commercial assets, and the broad-based valuation process of B.C. Assessment just can't accommodate for all the nuances of each asset, its inherent utility value or the motivation of its investors."
Litwin said the commercial market is influenced by its investors, who are motivated by a variety of factors including cash flow, capital or tax deferment.
He also noted the city has a history of seeing commercial property trade as much as 80 per cent higher than assessed value.
"We don't expect these new assessed values to be any more or less indicative than they have been in the past," he said.
Randy Holt, vice-president of DTZ Victoria Real Estate, said increases seen in this year's commercial assessment roll are likely indicative of the strength of the local investment market, which has been bolstered by the continued low-interest environment.
"These factors have seen capitalization rates - representing the rate of return provided by investment properties - continue to be as low as or lower than we have ever seen," he said, adding that from B.C. Assessment's numbers the Crown agency is valuing premier properties accordingly.
At the end of the day, value in the commercial real estate market is determined by supply and demand, said Rick Pettinger, managing broker with DTZ Victoria.
"Whether it's a retail shopping plaza or fully leased industrial property, if it's in demand and there are buyers lined up, they ask about assessed value way later in the process," he said.
"They look at income, are there good tenants, parking and location. Assessed value doesn't come into it until we're well down the line."
- With files from Victoria Colonist
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